The information below is a broad outline of interlibrary loans and the GST. ALIA, in conjunction with PriceWaterhouseCoopers has produced a more detailed document - The new tax system: the goods and services tax and library and information services - for use by ALIA members. Please contact ALIA National Office [ph 02 6215 8219 fx 02 6282 2249] to obtain your copy.
GST and the recommended scale of charges for ILL
The general rule for applying the GST to ILL charges is that when interlibrary loans and document deliveries are charged for, a 10 per cent GST is incurred. Therefore, a charge of $12 would be raised to $13.20. Most libraries will be able to claim back the GST component of their payments [ the GST component is one eleventh (1/11) of the total payment ].
GST and free interlibrary lending
Some library networks lend to each other without charge. The Association has received a general ruling from the Australian Taxation Office that the provision of a loan or copies of documents under an agreement where no fee is charged, either by way of a voucher or in cash, is GST-free where there is no right of reciprocal service from the recipient of the loan or copy. In our submission the Association advised the ATO that within the inter library lending scheme there are a large number of co-operative groups/consortia which provide loans or copies from their specialised discipline or collection to other libraries at no charge, for example between health and medical libraries, law libraries, public library networks. The groups have formal arrangements in place whereby participating libraries are members. The groups operate under the same prinicples as the inter library lending scheme including that there is no financial or commercial gain by participating libraries, there is no cost to the user requesting the supply, and there is no legal requirement on any library to provide the supply, or to expect a supply of equivalent value.
Australian Tax Office advice and rulings
The ATO has an information service at http://ato.gov.au. Follow the tax practitioners link for the most detailed advice. There is little information available which is specific to libraries. Private rulings may be requested from the ATO. A private ruling is binding provided all the relevant information is given. If some important information regarding the situation is omitted, the advice will not be binding for the ATO. In additon, ATO private rulings may be superseded by public rulings. Those libraries with special ILL arrangements may wish to seek a private ruling. Rulings are based on the information provided, so it is important that you can provide evidence to back up your request. For example, in putting a case for GST-free gratis interlibrary lending, a library needs to show that it provides the service free of charge and without expectation of a service in return.