topic Re: Is GST only incurred on prepaid phones and tolls each time you use it? in Community Spirit

Is GST only incurred on prepaid phones and tolls each time you use it?

orabrush — Mon, 09 Jun 2014 05:20:48 GMT

If you buy $50 phone credit there is no GST. If you put $50 on a toll account is there GST?

Re: Is GST only incurred on prepaid phones and tolls each time you use it?

*crikey*mate* — Mon, 09 Jun 2014 07:21:18 GMT

You can only be charged GST for goods and services you use/consume.

Thus when you make a call, you receive the service. this is the point in time that you will be charged GST.

I guess they don't actually sell you the card iykwim - at that point you have not bought a good or used the service.It is only potential.

It is the same for tolls.

Yes, there is a GST component in your toll fees, but simply adding money to your account is not classified as using the service. It is not until you actually pass a toll point that you are charged the service fee associated with that toll, and it is at that time you "pay GST"

The money in these things are only potential spending - sort of like as if the money was still in your bank.

You have just decided that this is where you will eventually spend that money and allocated it accordingly.

Re: Is GST only incurred on prepaid phones and tolls each time you use it?

cherry*135 — Mon, 09 Jun 2014 12:46:43 GMT

ATO

Issue 13 - Tax invoices for prepaid non rechargeable telephone cards

Issue

What are the tax invoice requirements where phone calls are made with a pre-paid telephone card that is considered to be a FVV (face value voucher) for GST purposes (for example, phone cards used for fixed pay phones)?

Decision

The Commissioner will treat the receipt provided by the retailer for the purchase of a phone card as a tax invoice for the telephone calls that are made using that phone card. This decision applies only to pre-paid phone cards that are considered to be FVVs for GST purposes. The Commissioner will issue a formal determination under section 29-70 of the A New Tax System (Goods and Services Tax) Act 1999.

The person using the phone card may need to substantiate that all telecommunication supplies:

were taxable supplies to them (for example, not GST-free international mobile roaming supplies); and
were all creditable acquisitions;

if they want to claim input tax credits based on 1/11th of the price of the phone card shown on any invoice or tax invoice covered by the determination.

https://www.ato.gov.au/Business/Consultation--Business/In-detail/GST-issues-registers/Telecommunications-Industry-Liaison-Group---issues-register/?page=45