On 4 April 2012 the ATO issued a final GST ruling GSTR 2012/1 entitled “Goods and services tax: loyalty programs”. It concerns the GST implications of certain loyalty programs.
In particular, the ruling considers:
- whether it is necessary to apportion some consideration to the supply of points, when a member pays the consideration to purchase goods or services and as a consequence has points allocated to them
- whether a payment from a program partner to the loyalty program operator is consideration for a supply
- to the extent that such a payment is consideration for a supply, how is that supply characterised? Specifically, the Ruling considers the implications of such characterisation in determining whether the supply is to any extent GST free or input taxed
- whether the provision of a reward to the member (upon redemption of points by them) is a supply to the member for consideration
- whether any payments made by the loyalty program operator to a redemption partner is consideration for a supply made by the redemption partner to the loyalty program operator, or is instead consideration for the supply of the reward made to the member and
- whether the redemption partner makes a supply to the program member, even if it also makes a supply to the loyalty program operator.
The ruling was previously issued in draft form as GSTR 2011/D3.