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Edited version of your private ruling

Authorisation Number: 1012441398458

Ruling

Subject: GST and sale of goods

Question

Is your sale of the goods GST-free?

Answer

No, your sale of the goods is not GST-free, except where you export the goods within certain time limits. Where you do not export the goods, but sell the goods within Australia, your sale of the goods will be a taxable supply and goods and services tax (GST) will be payable on the sale.

Relevant facts and circumstances

You are registered for GST.

You carry on an enterprise of selling goods.

The goods are not food for human consumption and do not otherwise fall within the definition of food for GST purposes.

Presently, you only sell the goods within Australia, but you may export the goods in the future.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 7-1

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

A New Tax System (Goods and Services Tax) Act 1999 Section 38-2

A New Tax System (Goods and Services Tax) Act 1999 Section 38-3

A New Tax System (Goods and Services Tax) Act 1999 Section 38-4

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-4(1)

A New Tax System (Goods and Services Tax) Act 1999 Section 38-185

Reasons for decision

Section 7-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that GST is payable on taxable supplies.

Under section 9-5 of the GST Act, you make a taxable supply if:

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

There are no provisions in the GST Act to make your sale of the goods input taxed.

With respect to GST-free supplies, section 38-2 of the GST Act provides that a supply of food is GST-free, if the goods satisfy the definition of food in section 38-4 of the GST Act, and the supply is not excluded from being GST-free by section 38-3 of the GST Act.

'Food' is defined in subsection 38-4(1) of the GST Act to include (among other things) food for human consumption.

As the goods are not food for human consumption and do not otherwise fall within the definition of food for GST purposes, your sale of the goods is not a GST-free supply of food.

There are no other provisions in the GST Act to make your sale of the goods GST-free, except for the provisions dealing with the GST-free exports of goods.

In general terms, section 38-185 of the GST Act provides that a supply of goods by way of export is GST-free, if the goods are exported from Australia before, or within 60 days after, the first of the following two events:

Where exported goods are paid for by instalments, the payment referred to above, is the payment of any part of the final instalment, and the invoice referred to above, is the invoice for the final instalment.

Please note, the supplier can apply to the Commissioner to extend the 60 day period above.

Therefore, where you export the goods within the 60 day period above (or such further period as the Commissioner allows), your sale of the goods by way of export will be GST-free.

However, as there are no provisions in the GST Act to make your sale of the goods within Australia GST-free, your sale of the goods within Australia will be a taxable supply where all of the other requirements of section 9-5 of the GST Act are satisfied.

In this case, you are registered for GST, and your sale of the goods within Australia:

Therefore, your sale of the goods within Australia meets all of the requirements for a taxable supply under section 9-5 of the GST Act and as such, GST is payable on the sale.

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