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Edited version of your written advice
Authorisation Number: 1013091604655
Date of advice: 15 September 2016
Ruling
Subject: Goods and Services Tax (GST) and export of goods
Question
Is the supply of goods by an Australian entity (you) subject to GST where you export the goods from Australia to overseas?
Answer
No, your supply of the goods is GST-free under subsection 38-185(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Relevant facts and circumstances
• You are an Australian entity registered for GST in Australia.
• You buy goods from the Australian entities and on-sell the goods to export to overseas.
• You will organise a shipping agent to export the goods from Australia to overseas. You will be the shipper on the Bill of Lading and on all other relevant documentation.
• Under the agreement between your supplier and you, your supplier is required to deliver the goods to a wharf which will be an international port in Australia. The goods will then be lowered onto a ship. The carrier whom your supplier will deliver the goods will be the operator of the ship. Your supplier will clear the goods for export.
• In some cases, you will not pay your supplier in instalments. The goods will be exported from Australia before, or within 60 days after:
(a) the day on which your supplier receives any of the consideration for the supply; or
(b) if, on an earlier day, your supplier gives you an invoice for the supply - the day on which your supplier gives the invoice.
• In some cases, you will pay your supplier in instalments. The goods will be exported from Australia before, or within 60 days after:
• the day on which your supplier receives any of the final instalment of the consideration for the supply; or
• if on an earlier day, your supplier gives an invoice for that final instalment - the day on which your supplier gives the invoice.
• In some cases, you will not be paid for your supplies of the goods in instalments. You will export the goods from Australia before, or within 60 days after:
(c) the day on which you receive any of the consideration for the supply; or
(d) if, on an earlier day, you give an invoice for the supply - the day on which you give the invoice.
• In some cases, you will be paid for your supplies of the goods in instalments. The contracts for your sales of the goods will require you to export the goods from Australia and you will export the goods from Australia before, or within 60 days after:
• the day on which you receive any of the final instalment of the consideration for the supply; or
• if on an earlier day, you give an invoice for that final instalment - the day on which you give the invoice.
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 38-185
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-185(1)
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-185(3)
Reasons for decision
Taxable supply
GST is payable on a taxable supply under section 9-5 of the GST Act.
From the facts given, you have satisfied all the conditions of paragraphs 9-5(a) to (d) of the GST Act, as follows:
(a) you make the supply of the goods for consideration;
(b) you make the supply of the goods in the course or furtherance of your business;
(c) the supply involves the goods being removed from Australia (and therefore the supply is connected with Australia); and
(d) you are registered for GST in Australia.
Hence, your supply of the goods to the overseas entities is taxable to the extent that it is not GST-free or input taxed.
From the facts given, your supply of the goods does not satisfy the input taxed provisions under the GST Act. The GST-free provisions must also be taken into consideration.
Section 38-185 and GST-free supply
Section 38-185 of the GST Act discusses the GST-free exports of goods. Specifically, item1 in the table in subsection 38-185(1) of the GST Act (Item 1) and item 2 in the table in subsection 38-185(1) of the GST Act (Item 2) are relevant in this circumstance.
Item 1 provides that a supply of goods is GST-free if the supplier exports the goods from Australia before, or within 60 days (or such further period as the Commissioner allows) after:
(a) the day of which the supplier receives any of the consideration for the supply; or
(b) if, on an earlier day, the supplier gives an invoice for the supply - the day on which the supplier gives the invoice.
Item 2 provides that a supply of goods for which consideration is provided in instalments under a contract that requires the goods to be exported is GST-free, but only if the supplier exports the goods from Australia before, or within 60 days (or such further period as the Commissioner allows) after:
(a) the day on which the supplier receives any of the final instalment of the consideration for the supply; or
(b) if, on an earlier day, the supplier gives an invoice for that final instalment - the day on which the supplier gives the invoice.
Goods and Services Tax Ruling GSTR 2002/6 at paragraphs 32 to 35 describes the requirements of Items 1 and 2. Under Item 1 and 2, a supply of goods is GST-free where the supplier exports them from Australia and the export occurs within a specified time period.
For a supply of the goods to be GST-free under Items 1 and 2, the supplier must export the goods before, or within a 60 day period (or such further period as the Commissioner allows).
Supplier is the entity that exports
The requirement that the supplier is the entity that exports the goods is satisfied where:
• the supplier contracts at their own expense with an international carrier for the transportation of the goods to a destination outside Australia; or
• the supplier is responsible for delivering the goods to the operator of a ship or aircraft that has been engaged by another party to transport those goods to a destination outside Australia; or
• the requirements of subsection 38-185(3) of the GST Act are met.
From the facts given, you will export the goods from Australia to overseas. You will organise a shipping agent to export the goods from Australia to overseas. You will be the shipper on the Bill of Lading and on all other relevant documentation. Hence, we consider that you as the supplier will export the goods to a destination outside Australia. The next step is to determine whether the goods were exported from Australia within the 60-day period.
60-day period for export of goods
Under Item 1 and 2, your supplies of the goods will be GST-free if you export the goods from Australia before, or within the 60-day period.
You advised us that in some cases, you will not receive payment for your supplies of the goods in instalments. You will export the goods from Australia before, or within 60 days after:
(a) the day on which you receive any of the consideration for the supply; or
(b) if, on an earlier day, you give an invoice for the supply - the day on which you give the invoice.
Furthermore, you advised that in some cases, you will receive payment for your supplies of the goods in instalments. You will export the goods from Australia before, or within 60 days after:
• the day on which you receive any of the final instalment of the consideration for the supply; or
• if on an earlier day, you give an invoice for that final instalment - the day on which you give the invoice.
Accordingly, the supplies of the goods by you will satisfy all the requirements in Item 1 and 2 and the supply of the goods will be GST-free under subsection 38-185(1) of the GST Act.
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