Edited version of private ruling

Authorisation Number: 1011772852713

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: GST and journal subscription from an overseas entity

Question

Are the supplies of the two journals to you taxable supplies for the purposes of paragraph 11-5(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Advice

Based on the information received, the supplies of the two journals to you are taxable supplies for the purposes of paragraph 11-5(b) of the GST Act.

Relevant facts

You are located in Australia and are registered for the goods and services tax (GST).

You subscribe for two journals that are printed overseas and these journal's subscriptions are managed by entities located outside Australia.

You receive the subscription renewal forms and tax invoices by post from the overseas entity and you return them to the overseas entity.

You receive the journals by post. There is no indication that the journal has been sent to you by airmail.

The overseas entities are currently including GST in their price for the supply of the two journals and they have advised you the reason for charging GST is because they are registered for the Australian GST and since the supply is in Australia then GST is applicable.

You advised it is the responsibility of the supplier to deliver the journals to you once you have paid the subscriptions as the subscriptions' fees include airmail delivery to Australia.

Our record shows that the supplier is registered for GST.

Reasons for decision

Under section 11-20 of the GST Act, you are entitled to claim GST paid on any creditable acquisitions that you made.

Section 11-5 of the GST Act provides when a creditable acquisition is made. One of the requirements for a creditable acquisition is that the supply of the thing to you (the recipient) is a taxable supply (paragraph 11-5(b) of the GST Act).

Under section 9-5 of the GST Act you make a taxable supply if:

(a) you make the supply 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 Australia; and

(d) you are registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

For a supply to be a taxable supply all the requirements listed in section 9-5 of the GST Act must be satisfied.

What is the supply?

From the information received, the purpose of the subscription is to obtain the two journals. Accordingly, it is the GST status of the supply of these two journals that need to be considered as the subscription is incidental to the supply of these journals. By subscribing and making the payments you are agreeing that the two journals are to be mailed to you on a regular basis and you are making an advance payment for these two journals.

The next step is to determine the GST status of the two journals.

GST status of the two journals

From the information received the supplier of the two journals satisfies paragraph 9-5(a), 9-5(b) and 9-5(d) of the GST Act since they make the supply for consideration, the supply is made in the course of an enterprise that they carry on overseas and the supplier has advised you that they are registered for the Australian GST.

The next step is to determine whether the supply of the two journals are connected with Australia (paragraph 9-5 (c) of the GST Act).

Is the supply of the two journals connected with Australia?

Section 9-25 of the GST Act defines when a supply is connected with Australia. For the purposes of determining whether a supply is connected with Australia, section 9-25 of the GST Act makes a distinction between a supply of goods, a supply of real property and a supply of anything other than goods or real property.

Supply of goods

For GST purposes, a supply of goods is a supply of any form of tangible personal property, that is any form of personal property that has a physical existence but does not include intangible personal property such as intellectual property like a copyright.

The two journals are delivered in a tangible form and are therefore considered to be a supply of goods for GST purposes.

In determining whether a supply of goods is connected with Australia, a distinction is made in section 9-25 of the GST Act between supplies of goods wholly within Australia, supplies of goods from Australia and supplies of goods to Australia.

A supply of goods is connected with Australia if either of the following applies:

· The goods are delivered or made available in Australia to the recipient of the supply (subsection 9-25(1) of the GST Act).

· Goods are delivered in Australia if the goods are physically delivered in Australia. Goods are made available in Australia if the goods are physically made available in Australia. If the goods are delivered or made available in Australia to the recipient of the supply, the supply of goods is wholly within Australia. Both 'delivered' and 'made available' look at the place where the physical goods are at the relevant time.

· Goods which are delivered or made available in Australia to the recipient may be goods that the supplier has acquired domestically or imported.

· The supply of goods involves those goods being removed from Australia (subsection

· 9-25(2) of the GST Act)

· Removal of goods from Australia is a supply from Australia. Goods removed from Australia means the goods are physically taken out of Australia.

· The supply of goods involves those goods being brought to Australia and the supplier either imports the goods into Australia (paragraph 9-25(3)(a) of the GST Act) or installs or assembles the goods in Australia (paragraph 9-25(3)(b) of the GST Act).

The import of the goods into Australia or the installation or assembly of the goods in Australia is a supply of goods to Australia. This means that the supplier is either an exporter from outside Australia and importer into Australia, or an exporter from outside Australia and installer or assembler in Australia.

For more information on 'supplies connected with Australia', please refer to the Goods and Services Tax Ruling GSTR 2000/31 which is available at www.ato.gov.au

From the information received, it is the supplier that is responsible to deliver the journals to you in Australia. Since the supplier is the one that is bringing the journals to Australia by exporting them from outside Australia and organising for them to be delivered to you in Australia, we consider that the supplier is the importer of the journals in Australia and therefore the supply of the journals is connected with Australia. Paragraph 9-5 (c) of the GST Act is therefore satisfied.

Summary

As paragraphs 9-5(a) to 9-5(d) of the GST Act are satisfied, the supply of the two journals to you are taxable supplies to the extent that they are not GST-free or input taxed.

There are no provisions under the GST Act that make the supply of the two journals GST-free or input taxed.

Accordingly, for the purposes of paragraph 11-5(b) of the GST Act and based on the information received, the supply of the two journals to you are taxable supplies under section 9-5 of the GST Act.