C2003-48 Reimbursement of Goods and Services Tax

The purpose of this circular is to advise of the change in arrangements for payment of the Goods and Services Tax (GST) by employing organisations on the:-

• Transfer of employees' accrued leave between employing organisations

Based on decision ATO ID 2001/360 relating to GST, Premier's Circular 2001 -32 Reimbursement of Goods and Services Tax was issued to all agencies. That circular was based on Australian Taxation Office (ATO) advice at the time.

The Australian Taxation Office had cause to review the previous decision as contained in ATO ID 2001/360 in relation to payment of GST on transfer of employees accrued leave entitlements between employing departments. The ATO withdrew decision ATO ID 2001/360 on 15 August 2003 and replaced it with ATO ID 2003/730.

The new decision contained at ATO ID 2003/730 now states that the transfer of funds does NOT represent a supply and as such, does NOT attract payment of GST on the amount involved. A copy of this decision can be found on ATO website at: http://www.ato.gov.au

Agencies are advised that it will no longer be necessary for the receiving agency to issue the former agency with a tax invoice for the amount involved plus 10% for the GST.

Any enquiries from organisations concerning this matter should be directed to their client contact officer.

C Gellatly
Director-General

Issued : Employee Relations and Workforce Planning Services (Public Employment Office)
File no: 92/433
Date: 20 November 2003
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This circular replaces part of Circular no.C2001-32 in respect of GST on leave transfer payments.