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Edited version of your written advice
Authorisation Number: 1012934674765
Date of advice: 11 January 2016
Ruling
Subject: GST and supply of courses in Australia
Question
Do you need to include goods and services tax (GST) in your invoice to an overseas company when you deliver the courses in Australia?
Advice
Yes, you need to include GST in your invoice to an overseas company because your delivery of courses in Australia is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Relevant fact
You are an individual and carry on your business activity in Australia. You are registered for GST.
You have been engaged by an overseas company to deliver its courses to its Australian customer in Australia. You will bill the company for your training time.
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 38-190.
Reasons for decision
Note: Where the term 'Australia' is used in this document, it is referring to the 'indirect tax zone' as defined in subsection 195-1 of the GST Act.
GST is payable on a taxable supply. Under section 9-5 of the GST Act, an entity makes a taxable supply if:
(a) the supply is made 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 for GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
Your delivery of courses in Australia satisfies paragraphs 9-5(a) to 9-5(d) of the GST Act as:
(a) you make the supply for consideration; and
(b) your supply is made in the course of an enterprise that you carry on in Australia; and
(c) your supply is connected with Australia as the delivery of courses is done in Australia and through an enterprise that you carry on in Australia; and
(d) you are registered for GST.
However, your delivery of courses is not a taxable supply to the extent that it is a GST-free or input taxed supply.
There is no provision under the GST Act that makes your delivery of courses an input taxed supply.
GST-free supply
Relevant to your delivery of courses that you make to the overseas company is item 2 in the table in subsection 38-190(1) of the GST Act (item 2).
Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free 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 on the non-resident's enterprise, but is not registered or required to be registered for GST.
Accordingly, where the provisions in either (a) or (b) above are met, the supply will be GST-free if the non-resident is not in Australia when the thing supplied is done (that is, when the delivery of the courses is performed).
However, item 2 is limited by subsection 38-190(3) of the GST Act.
Limitations of item 2 - subsection 38-190(3) of the GST Act
Subsection 38-190(3) of the GST Act provides that, without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if:
a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and
b) the supply is provided or the agreement requires it to be provided to another entity in Australia.
You have a contract with an overseas company and the contract requires you to provide the courses to an entity in Australia. In this instance, subsection 38-190(3) of the GST Act is applicable as you are required to deliver the courses to another entity in Australia at the request of the overseas company.
Your delivery of courses is not GST-free under item 2 by virtue of subsection 38-190(3) of the GST Act.
For more information on item 2 and subsection 38-190(3) of the GST Act refer to Goods and Services Tax Rulings GSTR 2004/7 and GSTR 2005/6 which are available from the legal database of www.ato.gov.au
Summary
Your delivery of courses in Australia at the request of the overseas company is a taxable supply under section 9-5 of the GST Act. You are liable to pay GST on this supply.
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