ATO Interpretative Decision

ATO ID 2003/1143 (Withdrawn)

Goods and Services Tax

GST and supply of exhibition space to non-residents
FOI status: may be released

The ATO view on this issue is covered in paragraph 107 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.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 supplier of exhibition management services, making a GST-free supply under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies exhibition space in Australia to a non-resident?

Decision

No, the entity is not making a GST-free supply under section 38-190 of the GST Act when it supplies exhibition space in Australia to a non-resident as they are making a supply of 'real property' for GST purposes.

Facts

The entity provides exhibition management services for exhibitions that are held in Australia. In the course of carrying out these activities, the entity supplies exhibition space to resident and non-resident recipients.

The recipients are charged a fee for the exhibition space according to the size of the stand.

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. The entity is supplying exhibition space in Australia to a non-resident recipient. This supply is not the supply of goods however it needs to be determined whether it is a supply of real property.

'Real property' is defined in section 195-1 of the GST Act to include:

•: any interest in or right over land; or
•: a personal right to call for or be granted any interest on or right over land; or
•: a licence to occupy land or any other contractual right exercisable over or in relation to land.

Therefore, supplies such as leases and licences to occupy property are supplies of 'real property' for GST purposes. Paragraph 53 of Goods and Services Tax Ruling GSTR 2003/8 states that the supply of a right, that is the supply of real property for GST purposes, is a supply that is outside the operation of section 38-190 of the GST Act.

The supply of exhibition space by the entity to a non-resident recipient may only be considered under section 38-190 of the GST Act where it is not the supply of a licence to occupy real property.

Although not tested in Australia, the term 'a licence to occupy land' has been the subject of litigation in foreign jurisdictions. In particular, Miller Freeman World-wide plc (No. 2). [1998] BVC 2197 explained that in examining a transaction, the substance and reality of the supply must be considered. In this case, it was held that in substance and reality, what the appellant supplied to an exhibitor in return for consideration was the right to occupy a space at the venue of the supplier. Whilst the supplier also engaged in activities to ensure that potential customers attended, this merely increased the value of the right to occupy but not the nature of the supply itself.

The entity makes the supply of exhibition space for consideration that is calculated by reference to the size of the recipients space in the exhibition rather than any specific rights associated with the exhibition.

Therefore, the supply is a supply of real property as defined in section 195-1 of the GST Act. The entity is not making a GST-free supply under section 38-190 of the GST Act when it supplies exhibition space in Australia to a non-resident.

Date of decision: 10 September 2003

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 38-190
   section 195-1

Case References:
Miller Freeman World-wide plc (No. 2).
[1998] BVC 2197

Related Public Rulings (including Determinations)
Goods and Service Tax Ruling GSTR 2003/8

Keywords
Goods and services tax
GST international services
GST supplies & acquisitions
Taxable supply

Business Line: GST

Date of publication: 19 December 2003

ISSN: 1445-2782

history

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

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