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Ruling

Subject: Goods and services tax (GST) and tour guide services

Question

Is GST payable on your supplies of tour guide services in Australia where you provide these supplies to foreign tourists?

Answer

Yes.

Relevant facts and circumstances

You are registered for GST.

You supply tour guide services in Australia for consideration. You provide these supplies to foreign tourists.

The fees for visiting Australian tourist attractions are charged by agents in overseas countries in foreign currencies.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

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

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

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(3)

Reasons for decision

Summary

GST is payable on your supplies of tour guide services in the circumstances in question, as your supplies of these services satisfy all of the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Your supplies of these services are not GST-free under subsection 38-190(1) of the GST Act.

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 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

you *carry on; and

(c) the supply is *connected with Australia; 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.

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

In your case, you satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the tour guide services for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, your supplies of these services are connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your supplies of the services are input taxed.

Therefore, what remains to be determined is whether your supplies of the services are GST-free.

A supply of services to a non-resident may be GST-free under item 2 in the table in subsection 38-190(1) of the GST Act (item 2) where the non-resident is not in Australia when the services are performed.

Subsection 38-190(3) of the GST Act provides that a supply covered by item 2 is not GST-free if:

(a) it is a supply under an agreement entered into with a non-resident; and

(b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia.

In accordance with paragraph 31 of Goods and Services Tax Ruling GSTR 2004/7, the requirement that the non-resident is not in Australia when the thing supplied is done is a requirement that the non-resident is not in Australia in relation to the supply when the thing supplied is done.

In accordance with paragraph 35 of GSTR 2004/7, a non-resident individual is in Australia if that individual is physically in Australia. If a non-resident individual recipient is physically in Australia and in contact (other than contact which is only of a minor nature) with the supplier, that presence is in relation to the supply.

In the situation in question, you are supplying tour guide services to non-residents. The tours in question are in Australia. Where you provide your supplies of the services to customers who are non-resident individuals, your customers are in Australia when these tour guide services are performed. These customers are in contact (other than contact which is only of a minor nature) with the supplier when these services are performed. Therefore, the recipients of your supplies in these cases are in Australia in relation to your supplies when you perform the services. Hence, you are not making a GST-free supply of services under item 2 where you supply tour guide services to non-resident individuals, the tours are in Australia and you provide your supplies of the services to your customers.

Where you make a supply of tour guide services (relating to an Australian tour) under an agreement you have with a non-resident entity and you provide, or the agreement you have with that non-resident entity requires you to provide, your supply of tour guide services to another entity (a third party), you will provide, or the agreement will require you to provide, your supplies of the services to the third party in Australia. Hence, under these circumstances, you will not make a GST-free supply under item 2.

There are no provisions in the GST Act under which your supplies of tour guide services will be GST-free under the circumstances in question. Therefore, GST is payable on your supply of these services under those circumstances, as all of the requirements of section 9-5 of the GST Act are satisfied.

Additional information

If you supply rights to Australian land products (for example, tickets for entry to entertainment venues), GST would be payable on these supplies, as these supplies would satisfy all of the requirements of section 9-5 of the GST Act.