GST Q&A – Are fees to assess engineering plans exempt under Division 81?

Clarification of the operation of Div 81 of the GST Act.

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Council charges for the ‘assessment of engineering plans as part of planning permits’. This fee is a Council set fee for assessing plans when the planning permit does not require a subdivision, assessment has to be carried out by Council and not a third party.

We are assessing the fee using the flowchart for Div 81 of the GST Act (i.e. A New Tax System (Goods and Services Tax) Act 1999 and are not sure whether subsection 81-10(1) applies due to the ‘not’ in (1).

If we say that s. 81-10(1) applies, the fee will result in being exempt as reg. 81-10.01 does not apply. However, if we answer ‘yes’ then the fee will be taxable as reg. 81-15.01 will not apply.

Any comment on how to proceed in relation to 81-10(1) would be greatly appreciated.


In terms of the flowchart, you appear to have got to this point:

  • Is the item a tax? No
  • Is the item a fee or charge? Yes
  • Does subsection 81-10(1) apply?

Subsection 81-10(1) states that ‘a payment … is not the provision of consideration to the extent the payment is an Australian fee or charge that is of a kind covered by subsection (4) or (5)’.

Subsection 81-10(4) covers a fee or charge:

‘ … if the fee or charge

  • relates to; or
  • relates to an application for;
    the provision, retention, or amendment, under an Australian law, of a permission, exemption, authority or licence (however described)’.

Subsection 81-10(5) covers fees for doing things relating to information (e.g. recording, copying, modifying, accessing, receiving, processing and searching for information). This does not appear to apply to your facts.

Therefore, if the fee being charged is covered by s. 81-10(4) or (5) then s. 81-10(1) applies, and the fee is NOT consideration. The flowchart would continue as follows:

  • Does subsection 81-10(1) apply? Yes
  • Does regulation 81-10.01 apply? No (assuming reg. 81-10.01(1)(h) does not apply on the basis that you have advised that this service must be carried out by Council)
  • Result: Exempt s. 81-10(1)

However, if the fee is not covered by s. 81-10(4) or (5), then s. 81-10(1) will not apply. This requires some further analysis before being able to conclude the GST treatment. As you have advised that this inspection service must be carried out by Council, we have assumed that the supply would be regulatory in nature, and that the supply cannot be provided by an entity other than Council. Accordingly, the flowchart would continue as follows:

  • Does subsection 81-10(1) apply? No
  • Does regulation 81-15.01 apply? Yes (assuming reg. 81-15.01(1)(f) applies)
  • Result: Exempt regulation 81-15.01

The above process also appears to be consistent with the ATO view of ‘engineering inspection fees’ as expressed in a class ruling, CR 2013/32 (the Ruling). We note that while the Ruling only applies to relevant NSW Councils, the analysis is nonetheless beneficial.

In this regard, we particularly refer to Note 1 in paragraph 37 of Appendix 1 to the Ruling. This sets out the analysis where the supply is covered by s. 81-10(4) and is one that can be made in a competitive market by an entity that is not an Australian government agency. In this circumstance, it appears that the provisions of both reg. 81-10.01(1)(h) and reg. 81-15.01(1)(f) would apply, and if this is the case, the fee would be taxable via the tie breaker in reg. 81-15.02(2).

Disclaimer: This article is based upon information available as at the time of publishing and may be subject to change.