Australian Taxation Office
91 Waymouth St Adelaide SA 5000
P0 Box 9935, Adelaide SA 5000
Telephone: (08) 8208 1111
Facsimile: (08) 8228 4396
26 February 2001
Our Reference: CST/WAY/CRS46536/CWMS 185066
Contact Officer: Garry ROBERTS
Contact Phone: 08 8228 4330
Australian Catholic Bishops Conference
Attention: John Andrew
GPO Box 368
Canberra ACT 2601
Dear Mr Andrew
I refer to your letter of 21 December 2000 and apologise for the delay in responding to your query regarding supplies between members of the Catholic GST religious group.
You have provided the following facts:
The Australian Catholic Bishops Conference is the principal member of the Catholic GST religious group.
Computer software problems have led to a number of supplies made by one member of the Catholic GST religious group to another member of the Catholic GST religious group being treated as taxable supplies. You have stated that the computer software "cannot be modified in a cost effective manner at this time..." You have further stated that the members making taxable supplies and those making creditable acquisitions have been accounting for these transactions in accordance with the general rules of GST law.
You have contended, using the Explanatory Memorandum to the Indirect Tax Legislation Amendment Bill 2000 in support, that the GST Act does not require all transactions between members of the Catholic GST religious group to be treated as not subject to GST.
In a telephone conversation of 22 February 2001 between yourself and Garry Roberts of the ATO you stated that you believed the software problem mentioned above will be resolved by 19 March 2001.
You have asked the following question:
Does the GST Act require that all supplies between members of the Catholic GST religious group be treated as not subject to GST?
GST religious groups
Subsection 49-30(1) of the A New Tax System (Goods and Services Tax) Act 1999 ("GST Act") states that "a supply that a member of a GST religious group makes to another member of the same GST religious group is treated as if it were not a taxable supply." Conversely, subsection 49-35(1) of the GST Act states that "an acquisition that a member of a GST religious group makes from another member of the same GST religious group is treated as if it were not a creditable acquisition."
The two provisions discussed above act together to prevent transactions between members of the same GST religious group being subject to GST. Consequently, all transactions between members of the Catholic GST religious group will not be subject to GST.
You have contended that the Explanatory Memorandum of Indirect Tax Legislation Amendment Bill 2000 does not support this interpretation of the relevant provisions of the GST Act.
The meaning and consequent effect of subsections 49-30(1) and 49-35(1) of the GST Act is stated clearly and without ambiguity in the provisions themselves. Under the legislation concerning interpretation of Acts, recourse to extrinsic materials such as explanatory memoranda is allowed to confirm the ordinary meaning of a provision as provided by its text, to determine the meaning of a provision when the provision is ambiguous or obscure or to determine the meaning of a provision when the ordinary meaning of a provision as provided by its text when placed into the context of the Act leads to an absurd or unreasonable result.
Given the meaning of subsections 49-30(1) and 49-35(1) of the GST Act is clear and remains so in the context of the GST Act, recourse to the Explanatory Memorandum of Indirect Tax Legislation Amendment Bill 2000 is not warranted nor is it permitted.
Compulsion or discretion?
You have asked whether all transactions between members of the Catholic GST group must be treated as not subject to GST or whether members of the Catholic GST religious group may treat transactions as subject to GST.
A reading of the relevant provisions discussed above allows for no discretion when dealing with supplies made by one member of the Catholic GST religious group to another member of the Catholic GST religious group. All supplies by members of the Catholic GST religious group to other members of the Catholic GST religious group must be treated as if they were not taxable supplies.
Members of the Catholic GST religious group involved in transactions with other members of the Catholic GST religious group are compelled to treat those transactions as not being subject to GST. No discretion exists for members of the Catholic GST religious group to treat particular transactions as subject to GST.
In conclusion, all transactions made by members of the Catholic GST religious group to other members of the Catholic GST religious group are not subject to GST and must in no circumstances be treated as subject to GST.
Period of Grace
It is understood the software problem that led to supplies being treated as taxable supplies will be resolved by the 19 March 2001. Accordingly, after 19 March 2001 the Catholic GST religious group must cease to treat some supplies between members of the Catholic GST religious group as taxable supplies.
This advice is a private ruling. I have attached explanatory notes on the date of effect, duration of this advice and your review rights.
If you have any further queries regarding this matter please contact Garry ROBERTS on 08 8228 4330.
for Rick Matthews
DEPUTY COMMISSIONER OF TAXATION
Goods and Services Tax
This advice is a private ruling for the purposes of section 37 of the Taxation Administration Act 1953. You (the entity to which this advice relates) can rely on this ruling unless you have misstated or suppressed a material fact.
Should a public ruling subsequently issue that conflicts with this advice, the public ruling will prevail. However, if you have relied on this advice, you will be protected in respect of what you have done up to the date of the change. This means that if you have underpaid an amount of GST, you will not be liable for the shortfall prior to the later ruling. Similarly, you will not be liable to repay an amount overpaid by the Commissioner as a refund.
You may rely on this advice until it is withdrawn by a public ruling or there is a change in the legislation affecting the treatment of the subject matter of this ruling for GST purposes.
You have a right to have this advice informally reviewed under the Taxpayers' Charter. If you want to do this, you should contact the person handling your case or the Tax Office where the decision was made. The review is normally conducted by a tax officer who was not involved in making the original decision.
This advice cannot, however, be reviewed under the Taxation Administration Act 1953 (TAA), as it is not a reviewable decision under subsection 62(2). Nor can it be reviewed under the Administrative Decisions (Judicial Review) Act 1977.
However, should you undertake your proposed transaction and it results in a net amount for a tax period, you can, under section 23 of the TAA, request us to make an assessment under section 22 of that Act of your net amount for that tax period. Under section 62 of the TAA, you may then object to the making of that assessment in the manner set out in Part IVC of that Act.
Freedom of Information
The Freedom of Information Act 1982 provides right of access to certain documents relating to this decision held by the Australian Taxation Office. Requests for access under this Act must be in writing and, if possible, made on a Request under the Freedom of Information Act 1982 form, available at any Taxation Office. Charges apply for this service. In certain circumstances, access may be denied, however, there are rights of review should you disagree with this decision. Please do not hesitate to contact the Australian Taxation Office with regard to any matters concerning Freedom of Information.