Edited version of private advice

Authorisation Number: 1051915768909

Date of advice: 17 December 2021

Ruling

Subject: GST and foreign sourced income

Question

Are you making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in relation to your handyman job?

Answer

Yes. You are making a taxable supply and are required to collect GST on the supply of handyman services.

This ruling applies for the following period:

Not applicable

The scheme commences on:

Not applicable

Relevant facts and circumstances

You carry on an online buying and selling enterprise and registered for GST.

In relation to your online trading activities:

•         You have no customers or suppliers within Australia

•         You buy and sell agricultural products

•         These products cannot be imported into Australia.

You also carry on an enterprise of handyman services.

In relation to your handyman job:

•         You issue invoices to your suppliers quoting your ABN

•         Your accounting system calculates GST from bills provided by your suppliers

•         You have not been charging GST for your services

•         You claim GST credits for your expenses.

Relevant legislative provisions

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

Reasons for decision

Summary

The supply of handyman services is considered as taxable supply under section 9-5 of the A New Tax System (Goods and Services) Act 1999 (GST Act). Therefore, you are required to collect GST on the supply of handyman services.

Detailed reasoning

You are liable to pay GST on taxable supplies.

The requirements of a taxable supply are outlined in section 9-5 of GST Act. You make a taxable supply if:

a)    the supply is for consideration;

b)    the supply is made in the course or furtherance of an enterprise that you carry on;

c)    the supply is connected with the indirect tax zone; 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.

Based on the information you have provided, the supply of services you provide in relation to your handyman work satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. You make your supplies for consideration in the course or furtherance of carrying on your enterprise within the indirect tax zone (Australia).

You are currently registered for GST and the supply of handyman services is neither GST-free not input taxed.

The operation of your enterprise is also established in a way that your automated accounting system will calculate GST from bills given to you by your suppliers. Using this information, you claim GST credits on your expenses in relation to your handyman work.

You also issue invoices and quote your ABN in relation to the supplies of handyman services.

You have informed us that you have not been charging GST on the supply of handyman services because you believe that your annual turnover from the supply of handyman services will not exceed $75,000. The $75,000 turnover is a registration threshold to determine whether or not a business will be required to register for GST.

Once you are registered for GST and quote your ABN on supplies in relation to any number of enterprises that you carry on, those supplies will be considered as taxable supplies and you are liable to charge GST and remit the GST to the ATO..

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