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Department of Treasury and Finance
Goods and Services Tax (Division 81)
 
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The Commonwealth’s A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that any Australian taxes, fees or charges, or the discharging of the liability to make such a payment, imposed under a law of a state, territory or the Commonwealth, is consideration for a supply and is subject to the Goods and Services Tax (GST).

An agreement was reached between the Commonwealth and the states and territories that GST would not apply to the payment of some taxes and compulsory charges. The Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations provides that an agreed list of these taxes and compulsory charges, that will be exempt from GST, will be made by a determination by the Commonwealth Treasurer.

The determination, made under Division 81-5 of the GST legislation, provides that an Australian tax, fee or charge included on that determination is not subject to GST.

The key criteria for an item’s inclusion in the Division 81 determination can be summarised as follows:

    • the item must be a tax imposed under Australian law or a fee or charge imposed under an Australian law; and
    • the item is payable to an Australian government agency.

Guidelines on the Division 81 process have been prepared to assist to determine whether taxes, fees and charges administered by Tasmanian Government agencies can be included on the Division 81 determination.

The Commonwealth Treasurer reviews the Division 81 determination twice a year to ensure that it remains current. An updated determination takes effect from 1 January and 1 July each year. As part of the review process, each state and territory is requested to review the Division 81 determination and advise of any additions, deletions or amendments to the part of the determination relating to their jurisdiction.

When introducing new taxes, fees and charges, it is important for agencies to take into consideration that the determination is only updated at two points in the year. If a new tax, fee or charge is introduced, it will be subject to GST until it can be included on the next Division 81 determination. Arrangements for special determinations can be made, but these are only used in exceptional circumstances.

Tasmania’s section of the most recent Division 81 determination can be downloaded as a separate document, alternatively the complete version of the most recent Australian Division 81 determination can be found here on the Comlaw web site.

For more information please contact Angelo Pavlides, Assistant Director, Intergovernment and Financial Policy Branch, Revenue Policy, on (03) 6233 3538 or by email at Angelo.Pavlides@treasury.tas.gov.au.
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