ATO Interpretative Decision
ATO ID 2001/644 (Withdrawn)
Goods and Services Tax
GST and engineering services provided overseasFOI status: may be released
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The ATO View on this issue is covered in paragraphs 32-38, 110-134 and paragraph 167 of Goods and Services Tax Ruling GSTR 2003/7.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Withdrawn 29 July 2005
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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, an Australian engineering company, making a GST-free supply under subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies engineering services on site for a construction project that is situated outside Australia?
Decision
Yes, the entity is making a GST-free supply under subsection 38-190(1) of the GST Act when it supplies engineering services on site for a construction project that is situated outside Australia.
Facts
The entity is an Australian engineering company.
The entity is supplying engineering services on a construction project situated outside Australia. The project involves the construction of plant that is real property. The engineering services are provided on the construction site outside of Australia.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under subsection 38-190(1) of the GST Act, certain supplies of things other than goods or real property, for consumption outside Australia, are GST-free. As the supply of engineering services is not considered to be a supply of goods or real property, its GST status is appropriately considered under subsection 38-190(1) of the GST Act.
Item 1 in the table in subsection 38-190(1) of the GST Act (Item 1) provides that a supply of a thing other than goods or real property is GST-free if the supply is directly connected with goods or real property situated outside Australia.
In this case, the entity is providing engineering services on site for a construction project that is situated outside Australia. The project involves the construction of plant. As the plant is real property, the services are directly connected with real property situated outside of Australia. Therefore, the supply satisfies Item 1.
As such, the entity is making a GST-free supply under Item 1 when it supplies engineering services on site for a construction project situated outside Australia.
Date of decision: 30 August 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-190(1)
subsection 38-190(1) table item 1
Keywords
Goods & services tax
GST free
Exports
Consumption outside Australia
ISSN: 1445-2782
| Date: | Version: | |
| 30 August 2001 | Original statement | |
| You are here → | 29 July 2005 | Archived |