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Edited version of private ruling
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Ruling
Subject: GST and export of goods
Question
Is the sale of goods to an overseas company subject to goods and services tax (GST)?
Answer
The sale of the goods to an overseas company will not be subject to GST, provided the requirements of section 38-185 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are met.
Relevant facts and circumstances
You operate an international business
You are registered for GST
You intend to sell some goods to an overseas company.
Reasons for decision
You are required to pay GST on any taxable supplies you make. The term 'taxable supply' is defined in section 9-5 of the GST Act. As well as stating when a supply is a taxable supply, section 9-5 also states that a supply is not a taxable supply where it is a GST-free supply.
The types of supplies that are GST-free are listed in Division 38 of the GST Act. Subdivision 38-E of the GST Act provides GST-free status to exports and other supplies for consumption outside Australia.
Subsection 38-185(1) of the GST Act contains a table of various types of exports and lists the circumstances under which each type of export will be GST-free.
Item 1 of the table covers the general export of goods, and states that:
n 'a supply of goods will be GST-free, but only if the supplier exports them from Australia before, or within 60 days (or such further period as the Commissioner allows) after: the day on which the supplier receives any of the *consideration for the supply, or
n if, on an earlier day, the supplier gives an *invoice for the supply - the day on which… the supplier gives the invoice.
(*denotes a term which is defined in section 195-1 of the GST Act)
The sale of the goods to the overseas company will be GST-free where the requirements of either subsection 38-185(1) of the GST Act are satisfied.
For a more detailed explanation of the application of section 38-185 of the GST Act you should examine Goods and Services Tax Ruling GSTR 2002/6 - export of goods. This ruling is available at our website www.ato.gov.au.