What this ruling covers
The Australian Taxation Office (ATO) has released a draft ruling, GSTR 2026/D2, explaining the rules for Recipient Created Tax Invoices (RCTIs). An RCTI is a tax invoice issued by the buyer (recipient) rather than the seller (supplier). This arrangement is common in grain trading, livestock sales, and contractor arrangements where the buyer sets the price.
This is a draft for public comment, not a final ruling. The ATO is seeking feedback before the ruling is finalised.
Rules that apply under the RCTI Determination 2023
The draft ruling explains rules that have applied since 15 June 2023 under the RCTI Determination 2023. The key requirements are:
- GST registration: Both the buyer and the seller must be registered for GST at the time the RCTI is issued.
- Timing: The RCTI must be issued within 28 days of the relevant supply.
- Written agreement: There must be a written agreement between both parties, or an agreement embedded in the RCTI document itself.
- Who determines value: For ordinary business entities (not government bodies or large businesses), the buyer must be the party who actually determines the value of the supply - meaning the buyer controls the pricing, not the seller.
When requirements are not met
The draft ruling covers what happens when these requirements are not met. A document that does not satisfy all requirements is not a valid tax invoice. The draft ruling also covers how agents can prepare RCTIs on behalf of buyers, and whether buyers can set off their own processing fees against the RCTI value.
Checklist and appendices
A checklist for meeting all RCTI requirements is included in Appendix 1 of the draft ruling.
Key actions
- If your business issues RCTIs - for example, you buy produce, livestock, scrap metal, or contractor services and you set the price - check that both you and your supplier are GST-registered at the time each RCTI is issued. If either registration has lapsed, the document is not a valid tax invoice.
- Confirm a written RCTI agreement is in place with each supplier, or that each RCTI document itself contains an embedded agreement. Without this, the RCTI does not count as a tax invoice and the supplier cannot use it to claim GST credits.
- Check that each RCTI is issued within 28 days of the relevant supply. This is a hard requirement under the RCTI Determination 2023.
- If you are a standard business entity (not a government body or large business), confirm that you - not your supplier - are the party actually determining the price of the supply. If the supplier determines the price, you are not eligible to issue an RCTI.
- Read the draft ruling and submit comments to the ATO before the consultation closes. Visit the ATO's GSTR 2026/D2 page and use Appendix 2 of the draft to submit feedback. Check item 4268 on the ATO's Advice Under Development program page for the submission deadline and status updates.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.