ATO Interpretative Decision

ATO ID 2002/1076 (Withdrawn)

Goods and Services Tax

GST and arranging insurance for international transport
FOI status: may be released

This ATO ID is to be withdrawn due to an amendment to section 38-355 of the A New Tax System (Goods and Services Tax) Act 1999 that applies from 1 July 2010. Despite its withdrawal from the database, this ATO ID remains relevant to supplies made prior to 1 July 2010.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 insurance broker, making a GST-free supply under item 7 in the table in section 38-355 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it arranges insurance on behalf of its client for the international transport of goods from overseas to Australia?

Decision

Yes, the entity is making a GST-free supply under item 7 in the table in section 38-355 of the GST Act when it arranges insurance on behalf of its client for the international transport of goods from overseas to Australia.

Facts

The entity is an insurance broker. The entity arranges an insurance policy with an insurer on behalf of a client who is transporting goods from overseas to their place of consignment in Australia. The entity receives a commission for this service.

The entity is registered for goods and services tax (GST).

Reasons for Decision

Section 38-355 of the GST Act provides that certain supplies of transport and related services are GST-free. Under paragraph (c) of item 7 in the table in section 38-355 of the GST Act (Item 7), the supply of arranging insurance is GST-free if the supply of the insurance itself is covered by item 6 in the table in section 38-355 of the GST Act (Item 6).

As an insurance broker, the entity is providing the service of arranging insurance on the behalf of its client. This service is GST-free under paragraph (c) of Item 7 if the supply of the insurance itself is GST-free under Item 6. Therefore, if the supply of the insurance itself is GST-free under Item 6, the entity's service is GST-free under Item 7.

Paragraph (c) of Item 6 states that the supply of insuring the transport of goods from a place outside Australia to their place of consignment in Australia is GST-free. As the insurer is supplying insurance for the transport of the client's goods from overseas to their place of consignment in Australia, The entity is supplying the service of arranging an insurance policy for the transport of goods from overseas to Australia. The supply of the insurance itself is covered by paragraph (c) of Item 6, and is therefore GST-free under section 38-355 of the GST Act. As such, the supply of arranging that insurance is also GST-free under Item 7.

Therefore, the entity is making a GST-free supply under Item 7 when it arranges insurance on behalf of its client for the international transport of goods from overseas to Australia.

[Note: As the entity is not making a taxable supply under section 9-5 of the GST Act when it arranges insurance for its client, there is no GST payable by the entity in relation to that supply.]

Date of decision: 24 August 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 38-355
   section 38-355 table item 6
   section 38-355 table item 6 paragraph (c)
   section 38-355 table item 7
   section 38-355 table item 7 paragraph (c)

Keywords
Goods and services tax
GST free
GST transport
Arranging transport
Insuring transport

Business Line: GST

Date of publication: 30 November 2002

ISSN: 1445-2782

history

	Date:	Version:
	24 August 2001	Original statement
You are here	7 January 2011	Archived

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