ATO Interpretative Decision

ATO ID 2003/30 (Withdrawn)

Goods and Services Tax

• This ATO ID is withdrawn from the database as it is superseded by Goods and Services Tax Rulings GSTR 2004/7 and GSTR 2007/2.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a supplier of services, making a GST-free supply under Division 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it prepares special export documents for its client who is making a GST-free export of goods?

Decision

No, the entity is not making a GST-free supply under Division 38 of the GST Act when it prepares special export documents for its client who is making a GST-free export of goods.

The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a supplier of services. The entity prepares special export documents for its client.

The entity's client is an Australian resident who exports goods from Australia GST-free. The export documents are a requirement of the Australian Customs Service and the Australian Quarantine and Inspection Service. The client is in Australia when the entity prepares the export documents. The entity does not have an interest in the goods that are exported.

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for Decision

Division 38 of the GST Act outlines the supplies that are GST-free. Under section 38-185 of the GST Act, the export of goods, in certain circumstances, is GST-free. Under section 38-190 of the GST Act, certain supplies of things other than goods or real property, for consumption outside of Australia, are also GST-free. In order to determine whether a supply is GST-free under either of these sections, the characteristics of the supply must be examined.

The entity prepares export documents for a client who exports goods GST-free. However, the entity is not exporting the goods and does not have an interest in the goods that are exported. As the supply made by the entity cannot be characterised as the export of goods, section 38-185 of the GST Act is not applicable. The preparation of export documents by the entity is a supply of services.

Section 38-190 of the GST Act provides that in certain circumstances, the supply of things other than goods or real property for consumption outside of Australia is GST-free. The entity is supplying things other than goods or real property. It is supplying its services. Therefore, it is appropriate to consider this provision.

As the entity is making a supply to an Australian resident, item 3 in the table in subsection 38-190(1) of the GST Act (Item 3) is of most relevance. Item 3 provides that a supply is GST-free where:

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it is made to a recipient who is not in Australia when the thing supplied is done;

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it is effectively used or enjoyed outside of Australia;

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it is not a supply of work physically performed on goods situated in Australia when the thing supplied is done; and

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it is not a supply directly connected with real property situated in Australia.

To satisfy the requirements of Item 3, the supply must be made to a recipient who is not in Australia at the time of the supply. The entity's client is in Australia when the export documents are prepared. In addition, the export documents are a requirement of the Australian Customs Service and the Australian Quarantine and Inspection Service and are therefore effectively used in Australia. As such, the supply is not GST-free under Item 3.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it prepares special export documents for its client who is making a GST-free export of goods.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   section 38-185
   section 38-190
   subsection 38-190(1) table item 3
   Division 40

Keywords
Goods and services tax
Exports
Consumption outside Australia
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  14 February 2003

ISSN: 1445-2782