ATO Interpretative Decision
ATO ID 2004/519
Goods and Services Tax
GST and supply of music CDs and electronic games by an agentFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, an agent, making a supply of a kind specified in the A New Tax System (Goods and Services Tax) Application of Agency Arrangements to the Multi-Media Industry Determination (No. 1) 2000 (Multi-Media Determination), when it supplies music compact discs and electronic games?
Decision
Yes, the entity is making a supply of a kind specified in the Multi-Media Determination when it supplies music compact discs and electronic games.
Facts
The entity is an agent. The entity supplies music compact discs (CDs) and electronic games to a third party on behalf of another party (principal).
The entity and the principal are both registered for goods and services tax (GST).
Reasons for Decision
The Multi-Media Determination applies to all supplies of multi-media products made through retailers and distributors of those products including, but not limited to, newsagents, supermarkets, convenience stores and delivery agents.
Clause 3 of the Multi-Media Determination provides that a reference to supplies of multi-media products includes, but is not limited to:
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- magazines
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- journals
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- newspapers
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- long-term publications
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- calendars
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- computer software (including CDs), and
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- products that are provided as add on or extension products to the products listed above.
The definition of multi-media products in the Multi-Media Determination is not an exhaustive one. As such, any multi-media product will be covered, unless the product is excluded under the Multi-Media Determination.
Clause 4 of the Multi-Media Determination provides that reference to multi-media products does not include:
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- lottery tickets or similar products of a gambling nature, or
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- phone cards.
The entity is an agent that supplies music CDs and electronic games to a third party on behalf of a principal. As music CDs and electronic games are not excluded, reference to multi-media products in the Multi-Media Determination also includes music CDs and electronic games.
Accordingly, the entity is making a supply of a kind specified in the Multi-Media Determination when it supplies music compact discs and electronic games.
Note: The Multi-Media Determination has the effect of requiring the entity and the principal to account for GST on the basis of, principal to principal, in relation to specified supplies and acquisitions. As such, the entity and the principal are taken to be in an arrangement under Subdivision 153-B of the GST Act, unless either the entity or the principal notifies the other in writing or both notify each other in writing that the Subdivision 153-B arrangement does not apply. The arrangement will also cease to have effect if the entity or the principal or both of them, cease to be registered for GST.
Date of decision: 25 March 2003
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
Subdivision 153-B
Related Public Rulings (including Determinations)
Goods and Services Taxation Ruling 2000/37
Other References:
A New Tax System (Goods and Services Tax) Application of Agency Arrangements to the Multi-Media Industry Determination (No. 1) 2000
Keywords
Goods and services tax
GST special rules
Acquisitions and supplies by Agents
ISSN: 1445-2782