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GST Q&A – Festival food stalls and GST

Is GST applicable to fees paid to Council by a food vendor for the right to have a stall on Council grounds during a festival?

Question

Could you please advise whether GST is applicable for fees paid to Council by a food vendor to have their stall on Council grounds during a festival.

Answer

The fees you have described should be GST exempt.

While your Council is not one covered specifically by Class Ruling CR 2014/6 (this applies only to ‘Councils that are members of the Local Government and Shires Association of New South Wales’), we highlight the following information contained in the Ruling:

Item:

Permit fee for approval to carry out street vending activities under section 139A of the Roads Act.   

Description:

Consent to the erection of a structure in, on or over a public road and located in a built-up or non-built up area where the structure is used for the purpose of selling any article or service and requires payments in the nature of rent; Includes erection of bollards built to a standard. Fee for street vending activity including sale of fruits and vegetables from barrows on a footpath; sale of newspapers from a stand on a footpath; sale of food, drinks, fruits or vegetables from a stall, a standing vehicle or structure (for example, kiosks) in a pedestrian mall, near a tourist area, sporting venue or the like not being on private land; sale of food or articles from a box, stall or table located on a footpath, including stalls operated by charitable organisations; sale of any goods from a stall, stand, or standing vehicle located in a kerbside lane or on the side of a carriageway; setting up of footway restaurants or take -away facilities for sale or serving of drinks in a pedestrian area; sale of flowers from a box on the side of a carriageway; sale of food, confectionary or other articles from a standing street or mobile vending vehicle on the side of a carriageway. Includes fees for ‘A’ frame ads and Sandwich Boards. May include a base fee and an additional base fee if a street upgrade is required and ancillary fees chargeable in connection with stalls, such as power connection fees, cool room shelf, hiring fees for stall structures, temporary food licences for stalls/sites selling food items. Includes licence preparation fee.      

GST Treatment:

Exempt – Paragraph 81-15.01(1)(f) of the GST Regulations – Regulatory

Item:

Fee to engage in a trade or business on Council land.

Description:

Includes fees for an approval or consent to place and/or operate market stalls and other similar structures for the purposes of engaging in any business, trade or occupation. Includes fees based on area occupied. Includes consents for placement on roads, footpaths, malls, parks, open space, etcetera. Includes land that Council manages under a Crown Land Trust.

GST Treatment:

Exempt – Paragraph 81-15.01(1)(f) of the GST Regulations – Regulatory

Whilst we note that this is a Class Ruling and therefore states that it only applies to the specific class of entities listed (namely, councils that are members of the Local Government Association of NSW and Shires Association of NSW), the Ruling provides guidance to other entities on the interpretation of the relevant law.

Therefore, if the local government rules that apply in your council are the same as those considered in the class ruling, or are based on the same or similar legislation, then the interpretation provided by the Ruling should have similar application to your council.

On this basis, the fees will not constitute consideration for a taxable supply (and be GST exempt) due to the application of Division 81 of the GST Act.

When preparing your analysis to support the tax position for the GST treatment of the fees, we recommend including a reference to the above.

 

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.