| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012409901233
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: GST and supply of goods
Issue
Is your supply of goods to an Australian company subject to the goods and services tax (GST) where the goods have never entered into Australia?
Advice
No, your supply of goods to an Australian company is not subject to GST where the goods have never entered into Australia.
Relevant facts
You are an Australian company and are registered for GST.
You supply goods to an Australian company. These goods are manufactured overseas.
At the request of the Australian company, the goods are delivered from the overseas manufacturing company to a place located overseas.
The goods never entered into Australia and the Australian company makes the payment to you for the supply of these goods.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5;
A New Tax System (Goods and Services Tax) Act 1999 Section 9-25
Reasons for decision
GST is payable on a taxable supply. Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), an entity makes a taxable supply if:
a) the entity makes the supply for consideration; and
b) the supply is made in the course or furtherance of an enterprise that the entity carries on; and
c) the supply is connected with Australia; and
d) the entity is registered or required to be registered.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
Accordingly, for your supply of goods to the Australian company to be a taxable supply, all the requirements in section 9-5 of the GST Act need to be satisfied.
From the facts received, you supply the goods for consideration to the Australian company and supply the goods in the course of an enterprise (business) that you carry on. Further you are registered for GST. In this instance, your supply of goods to the Australian company satisfies paragraphs 9-5(a), 9-5(b) and 9-5(d) of the GST Act.
What remains to be considered is whether your supply of the goods is connected with Australia (paragraph 9-5(c) of the GST Act) and is GST-free or input taxed under the GST Act.
Connected with Australia
The connection with Australia is one of the elements required to be satisfied before a supply is a taxable supply.
Goods and Services Tax Ruling GSTR 2000/31 (available at www.ato.gov.au) provides guidance on when a supply is connected with Australia.
In determining whether a supply of goods is connected with Australia a distinction is made in section 9-25 of the GST Act between supplies of goods wholly within Australia, supplies of goods from Australia, and supplies of goods to Australia.
A supply of goods is connected with Australia if:
· the goods are delivered or made available in Australia to the recipient of the supply (subsection 9-25(1) of the GST Act);
· the supply involves the goods being removed from Australia (subsection 9-25(2) of the GST Act);
· the supply involves the goods being brought to Australia and the supplier either imports the goods into Australia or installs or assembles the goods in Australia (subsection 9-25(3) of the GST Act).
You advised that the goods were never entered into Australia and were delivered directly from the overseas manufacturing company to a place located overseas. In this instance your supply of goods to the Australian company is not connected with Australia for GST purposes as:
· the goods are not delivered or made available in Australia to the Australian company;
· your supply of goods to the Australian company does not involve the goods being removed from Australia; and
· your supply of goods to the Australian company does not involve the goods being brought to Australia or the goods being installed or assembled in Australia.
As your supply of goods is not connected with Australia paragraph 9-5(c) of the GST Act is not satisfied. Your supply of goods to the Australian company is therefore not subject to GST as all the requirements in section 9-5 of the GST Act are not satisfied.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
