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Edited version of private ruling
Authorisation Number: 1011503366662
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Ruling
Subject: GST and the importation of goods
Question
Is your supply of goods a taxable supply where the goods are imported by the recipients?
Answer: No.
Your supply of goods is not a taxable supply where the goods are imported by the recipients.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You operate a business of supplying goods.
The goods are imported.
Generally, when you make a supply to an Australian customer you also arrange the importation of the goods and charge GST on the supply.
However, in some instances customers who place large orders arrange the importation of the goods themselves. They pay the GST when the goods are entered into Australia.
You do not install or assemble the goods in Australia.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 and
A New Tax System (Goods and Services Tax) Act 1999 Section 9-25.
Reasons for decision
These reasons for decision accompany the Notice of private ruling.
GST is payable on taxable supplies. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that a supply is taxable if:
(a) you make the supply for consideration; and
(b) the supply is made in the course or furtherance of an enterprise that you carry on; and
(c) the supply is connected with Australia; and
(d) you are registered, or required to be registered.
However, the supply is not taxable to the extent that it is GST-free or input taxed.
In order that the supply be a taxable supply it must satisfy paragraphs 9-5(a), (b), (c) and (d) of the GST Act.
In your case you make the supply of the goods for consideration; and in the course or furtherance of your enterprise; and you are registered for GST. Therefore paragraphs 9-5(a), (b) and (d) of the GST Act are satisfied. What is left to be determined is whether paragraph 9-5(c) is also satisfied.
In determining whether a supply is connected with Australia under paragraph 9-5(c) of the GST Act we must first consider section 9-25 of the GST Act which provides when supplies are connected with Australia.
According to section 9-25 of the GST Act, a supply of goods is connected with Australia if the goods are delivered, or made available, in Australia to the recipient of the supply. However, if a supply of goods involves the goods being brought to Australia, the supply of the goods is connected with Australia if the supplier either:
(a) imports the goods into Australia; or
(b) installs or assembles the goods in Australia.
In your case, you advised that the goods are brought to Australia from overseas. However, the recipients arrange the importation of the goods to Australia themselves. You do not import the goods; and furthermore, you do not install or assemble the goods in Australia. As such, your supply of the goods is not connected with Australia. Paragraph 9-5(c) of the GST Act is not satisfied. Accordingly, your supply of the goods, where the recipients import them, is not a taxable supply.
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