Compliance
GST ruling
A GST ruling is a public ruling issued by the ATO that sets out its view on how the GST law applies, binding the Commissioner for those who rely on it correctly.
GST rulings are the ATO's published statements on how it interprets the A New Tax System (Goods and Services Tax) Act 1999 and related law. They are a specific kind of public ruling, dealing only with GST. Each ruling covers a particular topic, such as how to treat a certain kind of transaction, what is needed for a valid tax invoice, or when a supply is connected with Australia. The rulings are written to help businesses and advisers apply the law in practice.
Because GST rulings are binding on the Commissioner of Taxation when they apply to a taxpayer, they provide a useful level of certainty. If you follow a GST ruling that covers your circumstances, the ATO cannot later take a different view for the period covered, and you are protected from additional GST, interest and penalties on that issue. This protection makes it worthwhile to check if a ruling exists before taking a position on a new type of transaction.
GST rulings are published in a numbered series, and the ATO updates, replaces or withdraws them over time. For example, a ruling may be replaced following a change in the law or a court decision. When using a ruling, check its status and its date of effect. A superseded ruling might still apply to arrangements that began before the change, depending on the transitional rules in the ruling.
Related to rulings are GST determinations, which address narrower, more technical questions, such as a specific classification issue or a particular instrument. These are also published and can be binding. The ATO also issues other GST guidance, including fact sheets and guides on its website, which explain how the ATO approaches a topic but do not carry the same legal protection as a formal ruling.
Rulings are written in a formal way and can be long, but they usually include a summary at the start and worked examples. Small business owners may find it easier to read the ATO's plain-language guidance first and then consult the ruling if they need detail. A registered tax or BAS agent can also interpret the ruling for your particular case.
The ATO cannot change the law through a ruling. If there is a clear conflict between a ruling and the legislation, the law prevails, though protection can still apply for a taxpayer who relied on the ruling in good faith. If you disagree with a ruling, you can ask the ATO to reconsider, or you can seek a private ruling on your own circumstances.
This page is general information only, so confirm your position with the ATO or a registered tax professional.
Worked example
A registered training company is unsure whether a particular fee it charges is GST-free as an education course. It finds a GST ruling dealing with the treatment of education supplies, and applies the criteria in the ruling to its course. The business concludes the course meets the criteria and charges no GST on a $5,500 course fee. If the ATO later reviews the claim, the ruling supports its position.
Practical tips
- Search for a GST ruling on your topic before taking a position on an unusual transaction.
- Check that the ruling is current, and read the sections on when it applies.
- Seek a private ruling if no public ruling fits your particular circumstances.