• BAS reporting – offshore to offshore supply of goods

    Some taxpayers are incorrectly including offshore to offshore supplies of goods in their business activity statements (BAS). This document sets out to clarify any confusion surrounding the reporting of these transactions.

    Supplies where goods are delivered from a place outside the indirect tax zone to another place outside the indirect tax zone are outside the scope of the Goods and Services Tax (GST) Act and do not need to be reported in your BAS.

    Example: International supply of goods

    Australian Company A sells goods to Australian Company B. The goods are shipped directly from Company A’s factory in China to Company B’s branch in Japan. This supply of goods does not attract GST and should not be included in the BAS.

    End of example

    We collect and share information and data with a number of external sources including the Department of Immigration and Border Protection (DIBP).We compare this information to amounts reported on your BAS. Including the above transactions creates a discrepancy between information reported to us in your BAS and data provided by DIBP. The inclusion of these transactions in your BAS may result in you being chosen for compliance action to explore the discrepancy.

    If you think you are including these supplies on your BAS you should review your reported sales at labels G2 and/or G3. If you find you have made a mistake that affects your GST payable amount, refer to Correcting GST Errors.

    If you have incorrectly reported supplies at labels G2 and/or G3, but there is no effect on GST payable, you do not need to do anything further. However, you should exclude these supplies and correctly report all sales at labels G2 and G3 on your future BAS.

    Frequently asked questions

    Not including these supplies in my BAS means my BAS and income tax return do not reconcile. What if I get selected for a review?

    Be assured we are aware of the different reporting obligations and this will not be cause for scrutiny. These supplies should be coded to 'No Tax' in your GST accounts and not reported in your BAS.

    I’ve been reporting like this for years, why is the ATO telling me this now?

    Research undertaken of compliance activities and data sharing with DIBP found the inclusion of offshore to offshore supplies of goods in the BAS is a common issue among taxpayers. Getting it right reduces the chances of having unnecessary contact with us.

    Do I include these sales in label T1 ‘PAYG Instalment Income’ in the BAS?

    Yes. Such sales still need to be included under label T1.

    See also:

      Last modified: 04 Dec 2015QC 47449