Edited version of your written advice

Authorisation Number: 1012670778591

Ruling

Subject: Goods and services tax (GST) and international supplies

Question 1

Is GST payable on your supply of a report to an overseas member where you transmit it over the internet to an overseas computer?

Answer

No.

Question 2

Is GST payable on your supply of access to complete a survey to an overseas member?

Answer

No.

Question 3

Is GST payable on your supply of a right to a discount to the price of places in an Australian conference to an overseas member?

Answer

No.

Relevant facts and circumstances

You are registered for GST

You work in a particular industry. You administer a program, which involves an annual survey of measures completed by Australian organisations which results in annual reports.

You extend membership to Australian based entities and overseas based entities. Members may submit data. Included in the membership is access to complete the survey; copies of sector wide reports relating to Australian organisations, and a discount for attendance at the annual conference held in Australia.

You charge members for supplies made under their membership.

Overseas members use the sector wide reports for a certain purpose.

You transmit reports electronically over the internet to overseas computers of overseas members. Some Australian members purchase hard copies of reports. The overseas members do not purchase hard copies of the reports.

The overseas members do not have a presence in Australia.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(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 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 38-190

Reasons for decisions

GST is payable by you on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Service Tax) Act 1999 (GST Act), which states:

You make a taxable supply 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 a *taxable supply to the extent that it is

*GST-free or *input taxed.

(*Denotes a term defined in section 195-1 of the GST Act)

You meet the requirements of paragraph 9-5(a) to 9-5(d) of the GST Act. This is because:

• you are supplying reports, access to surveys and rights to discounts for consideration

• you supply these things in the course of furtherance of an enterprise that you carry on

• your supplies of these things are connected with Australia, and

• you are registered for GST.

There are no provisions of the GST Act under which your supply of these things are input taxed.

Therefore, what remains to be determined is whether you are making GST-free supplies.

Question 1

Summary

GST is not payable on your supply of reports over the internet to an overseas member, because you are supplying something other than goods or real property and consumption takes place overseas.

Detailed reasoning

A supply of something, other than goods or real property, is GST-free under item 2 in the table in subsection 38-190(1) of the GST Act (item 2) if it is a supply that is made to a non-resident who is not in Australia when the thing supplied is done; and

(a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with real property situated in Australia; or

(b) the non-resident acquires the thing in carrying no the non-resident's enterprise, but is not registered or required to be registered for GST.

However, subsection 38-190(2) of the GST Act provides that a supply covered by item 2 is not GST-free if it is a supply of a right or option to acquire something the supply of which would be connected with Australia and would not be GST-free.

Subsection 38-190(2A) of the GST Act provides that a supply covered by item 2 is not GST-free if the acquisition of the supply relates to the making of a supply or real property situated in Australia that would be wholly or partly input taxed under Subdivision 40-B or 40-C of the GST Act.

Subsection 38-190(3) of the GST Act provides that a supply covered by item 2 is not GST-free if:

(a) it is a supply under an agreement entered into with a non-resident, and

(b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia.

Paragraphs 37, 38 and 41 of Goods and Services Tax Ruling GSTR 2004/7 explain when a non-resident company is in Australia for the purposes of item 2. They state:

37. A non-resident company is in Australia if that company carries on business (or in the case of a company that does not carry on business, carries on its activities) in Australia:

(a) at or through a fixed and definite place of its own for a sufficiently substantial period of time; or

(b) through an agent at a fixed and definite place for a sufficiently substantial period of time.

38. We consider that it would be reasonable for a supplier to conclude that a non-resident company is in Australia if:

• the company is registered with ASIC; or

• the company has a permanent establishment in Australia for income tax purposes.

41. A non-resident company is in Australia in relation to the supply if the supply is solely or partly for the purposes of the Australian presence, for example, its Australian branch. If the supply is not for the purposes of the Australian presence but that Australian presence is involved in the supply, the company is in Australia in relation to the supply, except where the only involvement is minor.

Paragraph 61 of Goods and Services Tax Ruling GSTR 2005/6 discusses the concept of 'provided to another entity in Australia'. It states:

61. Thus the expression 'provided to another entity' means, in our view, that in the performance of a service (or in the doing of some thing), the actual flow of that supply is, in whole or part, to an entity that is not the non-resident entity with which the supplier made the agreement for the supply. The contractual flow is to one entity (the non-resident recipient) and the actual flow of the supply is to another entity.

You supply reports over the internet to overseas members. As the thing supplied is supplied in intangible form, it is not goods. The thing supplied is also not real property.

You are making the supply to a non-resident entity that is not in Australia when the thing supplied is done.

The supply is neither a supply of work physically performed on goods situated in Australia when the thing supplied is done nor a supply directly connected with real property situated in Australia.

Subsections 38-190(2), 38-190(2A) and 38-190(3) of the GST Act do not apply.

Therefore, you make a GST-free supply of a report under item 2 where you send it over the internet to an overseas member. Hence, you do not make a taxable supply. Therefore, GST is not payable on your supply of report where you send it over the internet to an overseas member.

Question 2

Summary

GST is not payable on your supply of access to complete a survey to an overseas member, because you are supplying something other than goods or real property and consumption takes place overseas.

Detailed reasoning

Where you supply access to complete a survey to an overseas member, you meet the requirements of item 2 in the table in subsection 38-190(1) of the GST Act (item 2) because:

• you are thereby making a supply of something other than goods or real property

• you are making the supply to a non-resident entity that is not in Australia when the thing supplied is done, and

• the supply is neither a supply of work physically performed on goods situated in Australia when the thing supplied is done nor a supply directly connected with real property situated in Australia.

The exceptions in subsections 38-190(2), 38-190(2A) and 38-190(3) of the GST Act do not apply.

Therefore, you make a GST-free supply to the overseas member. Hence, you do not make a taxable supply. Therefore, GST is not payable on your supply of the access to complete the survey to an overseas member.

Question 3

Summary

GST is not payable on your supply of a right to a discount on the price of places in an Australian conference to an overseas member, because you are supplying something other than goods or real property and consumption takes place overseas.

Detailed reasoning

Item 4 in the table in subsection 38-190(1) of the GST Act (item 4) provides that a supply of something, other than goods or real property, is GST-free if:

• the supply is a supply of rights for use outside Australia, or

• the supply is to an entity that is not an Australian entity and is outside Australia when the right is granted.

However, subsection 38-190(2) of the GST Act provides that a supply covered by item 4 is not GST-free if it is a supply of a right or option to acquire something the supply of which would be connected with Australia and would not be GST-free.

Subsection 38-190(2A) of the GST Act provides that a supply covered by item 4 is not GST-free if the acquisition of the supply relates to the making of a supply or real property situated in Australia that would be wholly or partly input taxed under Subdivision 40-B or 40-C of the GST Act.

Where you give a discount on the price of places in an Australian conference, you are supplying a right to a discount on the price of places at a conference. The supply of this right is not a supply of a place itself.

Where you supply the right to a discount on the price of a place in an Australian conference to an overseas member, you meet the requirements of item 2 in the table in subsection 38-190(1) of the GST Act because:

• you are thereby making a supply of something other than goods or real property

• you are making the supply to a non-resident entity that is not in Australia when the thing supplied is done, and

• the supply is neither a supply of work physically performed on goods situated in Australia when the thing supplied is done nor a supply directly connected with real property situated in Australia.

The exception in subsection 38-190(2) of the GST Act does not apply in respect of your supply of the right to a discount to the price of places in an Australian conference, because the discount does not give an entity the right to receive the supply of a place. You are just supplying a right to a discount on the price of the places.

The exceptions in subsections 38-190(2A) and 38-190(3) of the GST Act do not apply.

Therefore, you make a GST-free supply to the overseas member under item 2.

The supply of the right to the discount is also GST-free under item 4 because:

• it is a supply of something other than goods or real property

• it is a supply of a right to a non-resident who is outside Australia when the thing supplied is done, and

• the exceptions in subsections 38-190(2) and 38-190(2A) of the GST Act do not apply.

Hence, you do not make a taxable supply. Therefore, GST is not payable on your supply of the right to the discount on the price of places in an Australian conference to overseas members.

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