• Transport and Taxi Industry Partnership - shipping industry - issues register

     

    Attention

    Where appropriate, individual issues in this issues register include a reference to a public ruling which is related to the relevant issue. In some cases, the issue is itself labelled as a public ruling for the purposes of section 105-60 of Schedule 1 to the Taxation Administration Act 1953. Where an issue in this issue register simply sets out the way the law applies, rather than dealing substantially with a question of legal interpretation, we have added to the item the description 'non-interpretative'.

    From 1 July 2010, issues labelled as a public ruling in this register will continue to be a public ruling even though section 105-60 of Schedule 1 of the Taxation Administration Act 1953 has been repealed.

    A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes.

    If you rely on issues in this register that are a ruling, we must apply the law to you in the way set out in the ruling. However, if we are satisfied that the ruling is incorrect and disadvantages you, we may apply the law in a way that is more favourable for you - provided we are not prevented from doing so by a time limit imposed by the law. You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

    Issues in this register that have not been labelled as public rulings, constitute written guidance. If you follow our information on these issues and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.

    End of attention

    (a) added, (u) updated, (w) withdrawn

     

    Date Issue ATO decision

    04/04/01 (a)

    Can a non-resident shipping company who registers for GST request the ATO to suppress the generation and mailout of a BAS?

    Non-interpretative - straight application of the law

    New arrangements have been put in place by the Australian Taxation Office (ATO) in respect of non-resident companies who register for goods and services tax (GST) but are not required to lodge a business activity statement (BAS) by virtue of section 57-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

    Registration applications should be referred to the following address:

    Registry Division -LMG
    PO Box 9100
    CHERMSIDE  QLD  4032

    Requests for suppression of BAS forms

    The following information should be provided along with the registration application in circumstances where the non-resident will not require a BAS to be generated and mailed out by the ATO.

    (i) Identification details for the resident agents through whom they are dealing (identification details should include the relevant ABN's).

    (ii) An undertaking that any taxable supplies and any taxable importations they are making for the period or future periods are through a resident agent.

    (iii) An undertaking that should they begin to make any taxable supplies or any taxable importations that are not through an agent, at any time in the future, they will advise the ATO of this and request the generation of a BAS for the relevant period.

    24/05/00

    Is GST payable on the local transport of goods (that is, the transport of goods within Australia)?

    For source of ATO view, refer to:

    • paragraphs 377 to 435 of GSTR 2005/6External Link - Goods and services tax: the scope of subsection 38-190(3) and its application to supplies of things (other than goods or real property) made to non-residents that are GST-free under item 2 in the table in subsection 38-190(1) of theA New Tax System (Goods and Services Tax) Act 1999, and

    • Paragraphs 265 to 267 of GSTR 2003/15External Link-Goods and services tax: importation of goods into Australia.

    As of 1 July 2010 the international transport provisions in the GST Act were amended and therefore the advice contained here for this issue is no longer valid. For current information in respect of international transport issues please see the ATO fact sheet entitled GST and international freight transport.

    Under Item 5 of section 38-355 the transport of goods is GST-free where it involves the

    'a) transport of goods from their *place of export in Australia to a destination outside Australia; or
    (b) from a place outside Australia to their *place of consignment in Australia; or
    (c) from a place outside Australia to the same or another place outside Australia.

    However, paragraph (a) or (b) only applies to the transport of the goods within Australia if it is supplied by the supplier of the transport of the goods from or to Australia (whichever is relevant).'

    International transport is defined at section 195-1 of the GST Act to mean:

    '(a) in relation to the export of goods-the transport of the goods from their *place of export in Australia to a destination outside Australia (including loading and handling within Australia that is part of that transport); or
    (b) in relation to the import of goods-the transport of the goods from a place outside Australia to their *place of consignment in Australia (excluding loading and handling within Australia).'

    Place of consignment is defined in the Act to mean

    '(a) if the goods are posted to Australia-the place in Australia to which the goods are addressed; or
    (b) in any other case-the port or airport of final destination as indicated on the *transportation document.'

    Place of export of goods means:

    '(a) if the goods were posted from Australia - the place from which they were posted; or
    (b) if paragraph (a) does not apply and the goods were packed in a freight container - the place where they were so packed: or
    (c) if the goods are self transported goods - the place, or last place, from which the goods departed Australia; or
    (d) if paragraph (a), (b) and (c) do not apply - the place or first place, where the goods were first placed on board a ship or aircraft for export from Australia.'

    Transportation document is further defined in the Act to include:

    '(a) a consignment note;
    (b) a house bill of lading;
    (c) an ocean bill of lading;
    (d) a house air waybill;
    (e) a master air waybill;
    (f) a sea waybill;
    (g) a straight line air waybill;
    (h) a sub-master air waybill;
    (i) other similar documents'

    In the case of, transport of exported goods from their place of export in Australia to a destination outside Australia, the transportation of the goods within Australia will be GST-free, if supplied by the same supplier of the transport who transports the goods overseas. Place of export is defined above.

    In relation to the import of goods the transport of the goods is only GST-free from a place outside of Australia to their place of consignment in Australia, that is the port or airport of final destination as indicated on the transportation document (in any case where the goods were not posted to Australia). Any transport of goods within Australia will only be GST-free if the transport is supplied by the supplier of the transport to Australia. Any domestic transport beyond the port or airport of final destination is not included as part of the GST-free transport and is not GST-free.

    The GST Act does not define the terms 'port or airport'. The ATO will be adopting the port or airport of final destination as the place where Customs clearance is effected. Customs clearance is effected by the presentation of an authority (to deal), issued by Customs under section 71B of the Customs Act 1901 (Customs Act) to take the goods into home consumption, to warehouse them or tranship them.

    The place where Customs clearance is effected will be a port or airport gazetted under section 15 of the Customs Act, and will include depots in those ports and airports licensed under section 77G of the Customs Act.

    Where goods are entered for warehousing, the port or airport of final destination will be the place where the Nature 20 (Entry for Warehousing) authority to deal is presented, not the warehouse licensed under section 79 of the Customs Act, where the goods are subsequently removed to.

    28/03/13

    Will the requirement to hold a tax invoice be satisfied where a replacement invoice is held?

    Non-interpretative - straight application of the law

    Yes, a replacement tax invoice would be acceptable for the purpose of claiming an input tax credit.

    24/05/00

    If you receive a rebate for a taxable supply to you do you need to make an adjustment?

    For source of ATO view, refer to general application of the principles in GSTR 2013/2External Link - Goods and Services Tax: adjustment notes.

    You will need to make an adjustment if there is a change to the consideration for an acquisition in a tax period after you have claimed the input tax credit on your activity statement.

    24/05/00

    Are the storage, move and like charges of temporary imported containers subject to GST?

    Non-interpretative - straight application of the law

    Freight containers can be imported temporarily without payment of customs duty pursuant to section 162A of the Customs Act. Division 171 of the GST Act provides that the GST is not payable while the duty is not payable.

    If the goods are exported in accordance with the conditions imposed under section 162A, the duty is not payable and the GST is not payable. If, however, the goods are not exported in accordance with those conditions, the duty and GST would become payable.

    Subsection 171-5(1A) states that an amount of GST on a *taxable importation of goods is not payable if:

    '(a) a security or undertaking described in section 162A of the Customs Act 1901 has been given; and
    (b) the goods are not dealt with in contravention of regulations made for the purposes of that section; and
    (c) either:
    (i) the goods are exported within the relevant period mentioned in paragraph 162A(5)(b) of that Act; or
    (ii) if the goods are described in subsection 162A(5A)-the goods are exported before the end of the relevant day mentioned in paragraph 162A(5A)(b).'

    However, importation of a container does not extend to any storage of the same.

    Repairs to imported containers destined for export will be GST-free pursuant to Item 5 in section 38-190. Generally, a supply of goods in the course of such repair work will be GST-free under Item 6 section 38-185.

    24/05/00

    To which tax period is GST payable on a supply attributed when an invoice is issued in a tax period before the services are performed?

    For source of ATO view, refer to GSTR 2000/12External Link - Goods and services tax: attributing GST payable and input tax credits for supplies and acquisitions under lay-by sale agreements and other GSTRs dealing with attribution.

    Section 29-5 provides that:

    '(1) The GST payable by you on a *taxable supply is attributable to:

    (a) the tax period in which any of the *consideration is received for the supply; or
    (b) if, before any of the consideration is received, an *invoice is issued relating to the supply-the tax period in which the invoice is issued.

    (2) However, if you *account on a cash basis, then:

    (a) if, in a tax period, all of the *consideration is received for a *taxable supply-GST on the supply is attributable to that tax period; or
    (b) if, in a tax period, part of the consideration is received-GST on the supply is attributable to that tax period, but only to the extent that the consideration is received in that tax period; or
    (c) if, in a tax period, none of the consideration is received-none of the GST on the supply is attributable to that tax period.'

    It is these rules and not the time of the supply which determine in which tax period you attribute the GST payable on a supply.

    Thus, if you are not using a cash basis of accounting you must include all the GST payable for a taxable supply in the earlier of:

    • the tax period in which you receive any of the consideration, or
    • the tax period in which you have issued an invoice to your customer asking for payment.

    This means you may have to account for GST before actually receiving payment. For these purposes an invoice is a document notifying an obligation for a payment. It will not be a tax invoice unless it contains information required to be included in tax invoices.

    24/05/00

    In the definition of 'International Transport' in section 195-1, does loading also include unloading?

    As of 1 July 2010 the international transport provisions in the GST Act were amended and therefore the advice contained here for this issue is no longer valid. For current information in respect of international transport issues please see the ATO fact sheet entitled GST and international freight transport.

    International transport in relation to the export of goods means that the transport of the goods from their place of export in Australia to a destination outside Australia which includes loading and handling within Australia that is part of that transport.

    However, in relation to the import of goods the transport of the goods from a place outside of Australia to their place of consignment in Australia, that is the port or airport of final destination as indicated on the transportation document, will be GST-free. Any loading and handling including unloading within Australia is not included as part of the international transport.

    19/07/00

    Who is the 'supplier' where a shipping line is a member of a consortium and the actual vessel that the goods to be supplied are shipped on will not in many cases be a vessel owned by that line?

    Non-interpretative - straight application of the law

    It will not matter whether the goods are shipped on a vessel owned by a member of a consortium or subcontracted to another vessel that is not part of the consortium. The supplier of the international transport will be the shipping line that has contracted to make the supply with its clients.

    19/07/00

    Whether regulatory agency fees (Customs and Quarantine) are a tax or a user-pay charge?

    Non-interpretative - straight application of the law

    GST applies to payment of taxes, fees and charges, except those taxes, fees and charges that are excluded from the GST by a determination of the Treasurer.

    Division 81 of the GST Act establishes that taxes, fees and charges will be consideration for supplies subject to the Treasurer's determination under this division.

    Certain duties of customs and quarantine services charges are specifically excluded from GST by the Treasurer's Final Division 81 Determination which was gazetted on 1 March 2000. The Treasurer's Final Division 81 Determination is available on our ATO website, www.ato.gov.au

    26/3/2013

    Payment of tax - business activity statement. Can one net payment which incorporates PAYG, GST etc be acceptable?

    Non-interpretative - straight application of the law

    Yes. All quarterly payment and remittance dates, including income tax instalment payments, withholding remittance and fringe benefits tax (FBT) payments will be aligned with the quarterly GST and pay as you go (PAYG) payments date, that is, 28 October, 28 February , 28 April and 28 July. Most businesses will, therefore, be able to complete a single business activity statement once a quarter, and make a quarterly payment.

    Businesses will be able to make a net payment after offsetting creditable amounts such as GST input tax credits.

    For larger businesses, the timing of GST, company tax and withholding tax will not be fully aligned. GST returns for larger business will be required each month, while their instalments of income tax will remain quarterly.

    1/11/00

    Is a non-resident shipping company required to be registered for GST in its own right, in situations where it is only making supplies and/or acquisitions through a resident agent?

    Non-interpretative - straight application of the law

    Yes. Regardless of whether the supplies or acquisitions are made through a resident agent, a non-resident shipping company is required to register for GST in its own right if:

    • it is carrying on an enterprise, and
    • it makes supplies connected with Australia, and
    • its GST turnover from supplies connected with Australia is, or is likely to be, A$75,000 or more.

    Further, a non-resident cannot claim input tax credits unless it is registered or required to be registered. This is despite the fact that Division 57 of the GST Act makes the resident agent liable for the GST on all taxable supplies and taxable importations made through the agent. Likewise, it is only the resident agent who is entitled to claim input tax credits on any creditable acquisitions or creditable importation made through the agent.

    1/11/00

    Is a non-resident shipping company required to lodge GST returns in its own right, in situations where it is only making supplies and/or acquisitions through a resident agent?

    Non-interpretative - straight application of the law

    No. The non-resident is not required to lodge a GST return for a period where the non-resident's net amount for a tax period is zero or the only taxable supplies or taxable importations that have been made that are attributable to that period, have been made through a resident agent.

    28/12/00

    What are the implications of GST in respect to Terminal Handling Charges (THC)?

    As of 1 July 2010 the international transport provisions in the GST Act were amended and therefore the advice contained here for this issue is no longer valid. For current information in respect of international transport issues please see the ATO fact sheet entitled GST and international freight transport.

    Terminal handling charges relate to stevedoring services being, the loading and handling of containers of goods in Australia, supplied to shipping lines by an entity carrying on an enterprise in Australia. The supply of such services by the resident entity would be subject to GST if the entity was registered or required to be registered. The shipping line would be entitled to claim an input tax credit in respect of the GST included in the price, if registered or required to be registered.

    Imports

    In respect of a supply of transport made by the shipping line to its clients, the terminal handling is considered to be loading and handling of goods and therefore specifically excluded from being part of the GST-free supply of international transport under Item 5 of section 38-355.

    Exports

    If the shipping line makes a supply of international transport to a client who exports the goods the supply of the transport of the goods from their place of export in Australia to a destination outside Australia (including loading and handling within Australia that is part of that transport) is GST-free under Item 5 of section 38-355.

    28/12/00

    What are the implications of GST in respect to Equipment Handling Charges (EHC)?

    As of 1 July 2010 the international transport provisions in the GST Act were amended and therefore the advice contained here for this issue is no longer valid. For current information in respect of international transport issues please see the ATO fact sheet entitled GST and international freight transport.

    Equipment handling charges relate to supplies made by an entity carrying on an enterprise in Australia, being the movement of containers subsequent to unloading from the ship in Australia. These supplies are made to shipping lines and would be subject to GST if the supplier was registered or required to be registered. The shipping line would be entitled to claim an input tax credit in respect of the GST included in the price, if registered or required to be registered.

    Imports

    In respect of a supply of transport made by the shipping line to its client any loading and handling of the goods is specifically excluded from the part of the GST-free supply of the international transport under Item 5 of section 38-355.

    Exports

    It would be a question of fact whether or not particular handling services supplied by the shipping line to the exporter formed part of a GST-free supply of transport under section 38-355. That is, the loading and handling must relate to the goods the transport of which is GST-free under Item 5 of section 38-355. For example, the movement of empty containers in preparation for their filling would not be a GST- free supply.

      Last modified: 23 Oct 2013QC 16402