ATO Interpretative Decision

ATO ID 2003/1121 (Withdrawn)

Goods and Services Tax

GST and provision of services to develop a website located outside Australia to a recipient who is in Australia
FOI status: may be released

The ATO view on this issue is covered in Goods and Services Tax Ruling GSTR 2000/31C.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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, a provider of website development services, making a GST-free supply under item 3 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it develops a website that is located outside Australia for a recipient who is in Australia at the time of the supply?

Decision

No, the entity is not making a GST-free supply under item 3 in the table in subsection 38-190(1) of the GST Act when it develops a website that is located outside Australia for a recipient who is in Australia at the time of the supply.

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

Facts

The entity is a provider of website development services. The entity develops a website that is located outside of Australia for a recipient who is in Australia at the time of the supply.

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

Under section 38-190 of the GST Act, certain supplies of things other than goods or real property, for consumption outside Australia, are GST-free. As a supply of website development services is not a supply of goods or real property, its GST status is appropriately considered under section 38-190 of the GST Act.

Item 3 in the table in subsection 38-190(1) of the GST Act (Item 3) provides that supplies of things used or enjoyed outside Australia are GST-free when certain requirements are met. The first requirement of Item 3 is that the supply is made to a recipient who is not in Australia when the thing supplied is done.

Although the entity develops a website that is located outside of Australia, the recipient is in Australia at the time of the supply. As the recipient is in Australia at the time of the supply, the entity's supply of website development services does not satisfy Item 3. Therefore, the entity is not making a GST-free supply 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 any other provision in 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 develops a website that is located outside of Australia for a recipient who is in Australia at the time of the supply.

Date of decision: 18 August 2003

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

Keywords
Goods and services tax
GST international services
Connected with Australia
Consumption outside Australia
Supplies used or enjoyed outside Australia
GST supply
Taxable supply

Business Line: GST

Date of publication: 12 December 2003

ISSN: 1445-2782

history

	Date:	Version:
	18 August 2003	Original statement
You are here	19 August 2005	Archived

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