Edited version of private ruling

Authorisation Number: 1011848311834

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Ruling

Subject: Goods and services tax (GST) and international transport of goods

Question

Is GST payable where you issued invoice number X?

Answer

No.

Relevant facts and circumstances

You sold certain sorts of goods to Y.

Under your contract for the sale of the goods, you agreed to be responsible for transporting the goods from a place in an overseas country to Y's door in Australia. You issued invoice number X to Y for shipment, customs duty and local costs etc.

Reasons for decision

Summary

GST is not payable where you issued invoice number X because the charge on this invoice is consideration for a GST-free supply of international transport of goods from a place outside Australia to their place of consignment in Australia.

Detailed reasoning

GST is payable by you where you make a taxable supply.

You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that

(c) you *carry on; and

(d) the supply is *connected with Australia; and

(e) 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.

(*Denotes a term defined in section 195-1 of the GST Act)

Paragraph (b) of item 5 in the table in subsection 38-355(1) of the GST Act provides that subject to subsection 38-355(2) of the GST Act, the international transport of goods from a place outside Australia to their place of consignment in Australia is GST-free.

Section 195-1 of the GST Act provides that international transport means in relation to the import of goods - the transport of the goods from a place outside Australia to their place of consignment in Australia.

Place of consignment is defined in section 195-1 of the GST Act to mean, if the supplier of the goods is to deliver the goods in Australia - the place in Australia to which the goods are to be delivered under the contract for the supply of the goods.

In accordance with subsection 38-355(2) of the GST Act, paragraph (a) of item 5 does not apply to a supply to the extent that the thing supplied is done in Australia, unless:

(a) the recipient of the supply:

(i) is a non-resident; and

(ii) is not in Australia when the thing supplied is done in Australia; or

(b) the supply is done by the supplier of the transport of the goods from or to

Australia (whichever is relevant).

In your case, you had a contract to supply goods and under this contract you were responsible for delivering those goods from a place in an overseas country to the customer's door in Australia. Therefore, you have made a supply of international transport of goods from a place outside Australia to their place of consignment in Australia.

Part of your supply of the international transport was done in Australia and you were the supplier of the transport of the goods to Australia.

Therefore, you made a GST-free supply of international transport under paragraph (a) of item 5 in the table in subsection 38-355(1) of the GST Act. The total charge shown on invoice number X is consideration for this GST-free supply. Therefore, this charge is not consideration for a taxable supply. Hence, GST is not payable where you issued invoice number X.