ATO Interpretative Decision
ATO ID 2001/491 (Withdrawn)
Goods and Services Tax
GST and training services supplied to a non-residentFOI status: may be released
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The ATO View on this issue is contained in paragraphs 195-196 of Goods and Services Tax Ruling GSTR 2004/7 and paragraphs 231-232 of Goods and Services Tax Ruling GSTR 2001/31This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a consultancy organisation, making a GST-free supply under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)(Item 2), when it supplies training services to a non-resident?
Decision
Yes, the entity is making a GST-free supply under Item 2 when it supplies training services to a non-resident.
Facts
The entity is a consultancy organisation. The entity supplies training services to a non-resident. The training services involve instruction to employees of the non-resident. These training services are held outside Australia.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under section 38-190 of the GST Act, certain supplies of things other than goods or real property, for consumption outside of Australia, are GST-free. As a supply of training services is not considered to be a supply of goods or real property, its GST status is appropriately considered under section 38-190 of the GST Act.
Of most relevance to this case is Item 2 which deals with supplies that are made to a non-resident outside of Australia. Paragraph (a) of Item 2 provides that a supply is GST-free where:
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- it is made to a non-resident who is not in Australia when the thing supplied is done; and
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- it is not a supply of work physically performed on goods situated in Australia when the work is done; and
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- it is not a supply directly connected with real property situated in Australia.
In this case, the training services are held outside of Australia. Therefore, the non-resident is not in Australia in relation to the supply, when the service is performed. As the training services involve instruction to employees the training services are not work physically performed on goods. Additionally, as the services are carried on overseas, the supply is not directly connected with real property situated in Australia. As such, the supply satisfies paragraph (a) of Item 2.
Therefore, the entity is making a GST-free supply under section 38-190 of the GST Act when it supplies training services to a non-resident.
Date of decision: 24 August 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 38-190
subsection 38-190(1) table item 2
subsection 38-190(1) table item 2 paragraph (a)
Keywords
Goods & services tax
Exports
Consumption outside Australia
GST-free
ISSN: 1445-2782
| Date: | Version: | |
| 24 August 2001 | Original statement | |
| You are here | 15 July 2005 | Archived |