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Subject: supply of access to software

Question 1:

Is the supply of access to software which is made to a purchaser by ABC via an online store operated by XYZ subject to GST where the purchaser is in Australia?

Answer:

No, the supply of access to software which is made to a purchaser by ABC via an online store operated by XYZ is not subject to GST where the purchaser is in Australia because that supply is GST-free.

Question 2:

Is the supply of access to software which is made to a purchaser by ABC via an online store operated by XYZ subject to GST where the purchaser is not in Australia?

Answer:

No, the supply of access to software which is made to a purchaser by ABC via an online store operated by XYZ is not subject to GST where the purchaser is not in Australia because that supply is GST-free.

Relevant facts and circumstances :

The Parties:

ABC is an entity established in Australia and registered for GST.

XYZ is an entity established in the Country Q which carries on business as an online reseller. ABC advised that XYZ does not have a presence in Australia.

ABC:

ABC supplies access to software which is hosted on a server located outside Australia.

ABC supplies access to the software to a purchaser via an online store operated by XYZ. A purchaser browses through XYZ's online store of software products and services by category.

If a purchaser decides to purchase access to ABC's software, XYZ's server (which is located in the Country Q) takes the purchaser's details and charges the purchaser (either on a one-off or recurring basis (for a subscription)). XYZ's server alerts ABC's server and ABC's software automatically creates an account to grant the purchaser access to ABC's software.

The purchaser does not download ABC's software. Instead the purchaser gains access to that software by using either the purchaser's web browser or another application. In either case the purchaser interfaces with data which sits on ABC's server located in the Country Q.

If a purchaser wants to stop the purchaser's subscription the purchaser notifies XYZ and XYZ's server instructs ABC's server to cancel the purchaser's access.

The purchaser does not advise XYZ whether the purchaser is inside or outside Australia or whether the purchaser will be making use of the supply in Australia, although the purchaser does supply the purchaser's name and address to XYZ. There is no User Agreement nor any Terms and Conditions governing the use of the software by the purchaser. The purchaser simply pays XYZ and provides the purchaser's name and address to XYZ.

XYZ's User Agreement:

ABC has agreed to the terms and conditions of XYZ's User Agreement ('Agreement').

Pursuant to that Agreement ABC agrees to use XYZ's software and the purchasing facility provided through XYZ's server to sell products over the Internet.

The Agreement states that ABC grants XYZ a right to sell and deliver ABC's products, but that ABC retains title and ownership of the intellectual property in the products after they have been transferred to purchasers.

The Agreement also states that ABC grants to XYZ the right to market, distribute and sell copies of ABC's products to purchasers and that legal ownership of the licenses for the products shall be transferred from ABC to XYZ and from XYZ to the purchaser upon:

· execution by the purchaser of XYZ's Purchase Agreement; and

· acceptance by the purchaser of ABC's license agreement packaged with the product

· and that XYZ shall not retain ownership of the licenses. XYZ agrees to forward to ABC in a timely manner all requests for warranty, maintenance or support services.

The Agreement states that all End Use License Agreements ('EULA') in respect of Electronic Products are solely between ABC and the purchaser and that the intellectual property rights in Products shall remain the sole property of ABC.

Twice monthly XYZ totals all sales made during the period from the 1^st through 14^th day of the month and the period from the 15^th day through last day of the calendar month and distributes the relevant total less VAT or any other applicable tax and XYZ's standard commission to ABC on the 15^th day after the end of each period. In respect of each sale of a Product XYZ agrees to pay ABC an amount equal to the purchase amount less XYZ's commission.

The Agreement states that XYZ serves solely in the capacity of an independent contractor and is not an agent of ABC and that nothing in the Agreement shall be deemed to constitute a partnership or joint venture between the parties or constitute one party the agent of the other.

We note that the supply made to a purchaser by ABC via XYZ's online store (i.e. access to software) may be a 'Product' (which is defined in the Agreement as a product offered for sale by XYZ and registered with XYZ) but is neither an 'Electronic Product' (as it is not delivered by download or e-mail) nor a 'Physical Product' (as it is not tangible). Consequently some of the provisions of the Agreement may not apply to that supply, for example there is no transfer of a licence from ABC to XYZ and from XYZ to the purchaser and ABC does not enter into a EULA with the purchaser.

XYZ's website:

The 'About XYZ' webpage describes the services offered by XYZ to a seller such as ABC as follows:

XYZ builds you a highly customizable, hosted order page that seamlessly integrates with your existing website's design and is displayed to your customers in their local language and currency…XYZ supports one-time purchases as well as recurring subscription payments…XYZ is a trusted reseller of software products and services. We handle all aspects of purchasing and delivery, including licensing and activation. We also take care of all aspects of buyer satisfaction and payment-based customer support…When your customers have questions, they'll get a very prompt and complete response from us, leading to goodwill repeat purchases, and increased revenue.

The XYZ ABCtore webpage describes the benefits to a purchaser who purchases a product from XYZ's online store as follows:

XYZ is an authorised reseller of software and other digital products. XYZ specialises in safe, secure Internet sales and fulfilment. By purchasing through XYZ you can be assured that you will receive the product you are purchasing. We take care of providing license codes and downloads for your purchase.

Download is instant

Your Product Key/Registration Code will be delivered instantly.

If you ever have a problem, you can get immediate help and resolution by emailing us at ….If you do not recognise a charge on your credit card and would like us to provide you with a receipt, or suspect that the charge is fraudulent, we can quickly investigate and help you to resolve the issue…If you have questions about returning products, please consult our Return Policy.

Relevant legislative provisions

A New Tax system (Goods and services Tax) Act 1999 section 9-5, section 38-190.

Reasons for decision:

Question 1 - purchaser in Australia

Summary:

As XYZ does not act as ABC's agent, the recipient of a supply of access to software made by ABC is XYZ, not the purchaser in Australia, i.e. ABC supplies the access to XYZ and XYZ then supplies that access to the purchaser. The supply of access by ABC to XYZ is GST-free.

Detailed reasoning:

Does XYZ act as ABC's agent?

Goods and Services Tax Ruling GSTR 2006/9 states:

Proposition 16: the total fact situation will determine the nature of a transaction, the entity that makes a supply and the recipient of the supply

222. Where the parties to a transaction have reduced their understanding of the transaction to writing, that documentation is the logical starting point in determining the supplies that have been made. An examination of any relevant documentation and the surrounding circumstances, which together form the total fact situation, is also important in determining whether the documentation captures the nature of a transaction for GST purposes.

223. Australian courts have held that an arrangement between the parties will be characterised not merely by the description the parties give to the arrangement, but by looking at the transactions entered into and the circumstances in which the transactions are made.

In the present case ABC and XYZ have recorded their relationship in the Agreement. The Agreement states that ABC has granted to XYZ the right to market, distribute and sell copies of ABC's Products and that legal ownership of licences to those Products shall transfer from ABC to XYZ and from XYZ to the purchaser. If the Agreement accurately records the agreement between ABC and XYZ then XYZ is the recipient of a supply of access made by ABC and the whereabouts of the purchaser is irrelevant in determining the GST treatment of that supply.

However, the whereabouts of the purchaser could be relevant to the GST treatment of a supply of access made by ABC if XYZ was ABC's agent in relation to that supply. If ABC supplies access to a purchaser through the agency of XYZ then the purchaser is the recipient of the supply made by ABC and ABC is the entity liable for any GST payable on that supply.

Goods and Services Tax Ruling GSTR 2000/37 states that an agency relationship can arise even where the contract governing a relationship specifically precludes it from being an agency (para 33) and that the following factors may show whether an entity is an agent, although no single factor (by itself) is determinative (Para 28):

· any description of you as an agent,

· having authority to act for another party, in an agreement (expressed or implied) between you and the other party;

· any exercise of the authority that you are given to enter into legal relations with a third party;

· whether you bear any significant commercial risk;

· whether you act in your own name;

· whether you are remunerated for your services by way of commissions and whether you are entitled to keep any part of your remuneration secret from another party; and

· whether you decide the price of things that you might sell to third parties.

In the present case the Agreement expressly states that XYZ is an independent contractor and is not ABC's agent. Pursuant to the Agreement ABC grants to XYZ the right to market, distribute and sell the product, an indemnity in respect of a claim or damage arising from a third party's use of the product, and certain warranties. In our view these provisions of the Agreement indicate that XYZ does not enter into legal relations with a purchaser on ABC's behalf.

If a purchaser has a problem in respect of a product, the XYZ store webpage advises the purchaser to email XYZ and refers the purchaser to XYZ's (not ABC's) return policy. This indicates that in the case of a problem or return of product, XYZ would accept the purchaser's claim and then rely on the indemnity given by ABC to XYZ in the Agreement to recover from ABC.

We note that XYZ acts in XYZ's own name when dealing with a purchaser. On the other hand, ABC, rather than XYZ, determines the price at which the product is sold to a purchaser and XYZ is remunerated by commission, but the Agreement also states that nothing in the Agreement shall constitute either party as an agent of the other.

Taking into account the 'no agency' clause L in the Agreement and the factors discussed above, we consider that XYZ does not act as ABC's agent. Thus the recipient of a supply of access to software made by ABC is XYZ, not the purchaser. ABC supplies the access to XYZ and XYZ then supplies that access to the purchaser.

Taxable supply:

Section 9-5 of the A New Tax system (Goods and Services Tax) Act 1999 ('GST Act') provides that an entity makes a taxable supply if the entity makes the supply for consideration and in the course or furtherance of an enterprise, the supply is connected with Australia and the entity is registered for GST or liable to be so registered.

ABC supplies the product to XYZ for consideration (the price set by ABC less the commission and any fees retained by XYZ), ABC carries on an enterprise (defined in section 9-20 of the GST Act to include an activity done in the form of a business) and ABC is GST registered. The issue is whether the supply made by ABC to XYZ is connected with Australia.

Connected with Australia:

Section 9-25 of the GST Act provides different tests for whether a supply is connected with Australia according to whether the supply is a supply of goods, real property, or any other thing. Thus it is necessary to determine what ABC supplies to XYZ.

The ruling request described the supply made by ABC as access to software that is hosted on a server in the United states and which is not downloaded by the purchaser - instead XYZ's server (also located in the Country Q) notifies ABC's server which automatically creates an account to give the purchaser access to ABC's software.

Supplies involving software are discussed in Goods and Services Tax Ruling GSTR 2003/8 which states that where a one-off solution is developed by a computer programmer for a client, the correct analysis of the supply will depend on all of the facts and circumstances, including the terms of the contract between the programmer and the client (para 33). GSTR 2003/8 also states that computer software supplied in intangible form, e.g. by downloading it from the Internet, is not a supply of goods (as no tangible property is supplied) and is not necessarily a supply of rights even where the recipient also receives a 'click-wrap' licence, but a supply of the copyright in a program which allows the recipient to modify, adapt, or copy the program for commercial purposes is a supply that is made in relation to rights (paras 89 -90). GSTR 2003/8 also states:

91. Where a one-off solution is developed by a computer programmer for a client, the correct analysis of the supply will depend on all the facts and circumstances, including the terms of the contract between programmer and client. XYZ or example, a one-off program may be developed as a solution to a particular information technology problem at great expense over a period of months.

92. Where, under the terms of the agreement, copyright in the program will vest upon its creation in the client, whether the program is delivered to the client electronically or on disk, the supply is a supply of services. There is no right supplied in these circumstances.

93. If the programmer contracts to develop a solution and make it available for the client, on terms that copyright in the program, once developed and accepted by the client, will be assigned to the client, the supply will be a mixed supply, comprising the development and a supply of the program and assignment of copyright in the program. Assignment of the copyright is the supply of a right, but supply of the program is not. The supply of the program is not a supply of goods even if it is delivered in tangible form on a disk.

In the present case ABC develops software, supplies access to that software to XYZ, but does not grant any copyright in that software to XYZ. Under the Agreement all XYZ can do is resell access to the software to purchasers. Based on the discussion in GSTR 2003/8 set out above we consider that the supply made by ABC is not the supply of a right but the supply of services.

Subsection 9-25(5) of the GST Act provides that a supply of anything other than goods or real property is connected with Australia if the thing is done in Australia or the supplier makes the supply through an enterprise that the supplier carries on in Australia.

In relation to the 'thing is done in Australia' test, Goods and Services Tax Ruling GSTR 2000/31 states:

65. If the 'thing' being supplied is a service, the supply of that service is typically done where the service is performed. If the service is performed in Australia, the service is done in Australia and the supply of that service is connected with Australia under paragraph 9-25(5)(a). This is the case even if the recipient of the supply is outside Australia.

66. However, the supply of a service to an offshore recipient may be GST-free under section 38-190.

The ATO's XYZ's fact sheet Trading over the Internet discusses a scenario where a New Zealand company develops virus protection software in New Zealand and then sells it online using a server located in New Zealand to a purchaser in Australia who downloads the software. In relation to the question of whether the supply of the software is a thing done in Australia the XYZ fact sheet states:

A computer program is essentially encoded instructions designed to cause a computer to perform a particular task or to produce a particular result. It is, in substance, knowledge or information (that is, intellectual property).

We consider that the supply of the computer program is the supply of information. As the supply of information involves work to develop the information, the supply is one of performance of services. The computer program or supply of information is 'done' where the information is developed.

Therefore, as the computer program is developed in New Zealand and not in Australia, the thing (that is, the computer program) is not done in Australia.

In the present case ABC supplies access to the software to XYZ, rather than allowing XYZ to download it, but we understand that ABC did the work to develop the software in Australia. Applying the reasoning in the ATO's XYZ fact sheet, the supply of the access by ABC to XYZ is done in Australia and therefore connected with Australia in terms of paragraph 9-25(5)(a) of the GST Act.

There is another basis on which the supply made by ABC to XYZ is connected with Australia as being a thing done in Australia. GSTR 2000/31 also states that where a right is supplied under an agreement, the 'thing is done' where the agreement is made, i.e. where the last act necessary to create a binding contract is performed (Para 76) and cites W A Dewhurst and co Pty Ltd v Cawrse [1960] VR 278, 282 which held that the last act necessary to create a binding contract was communication of acceptance and approved Entores v Miles Far East Corp [1955] 2 All ER 493:

Denning LJ said: 'When a contract is made by post it is clear law throughout the common law countries that the acceptance is complete as soon as the letter is put into the post box, and that is the place where the contract is made'. His Lordship then turned to the case of instantaneous communications and said that the rule is different: 'The contract is only complete when the acceptance is received by the offeror; and the contract is made at the place where the acceptance is received'.

Chitty on Contracts (29^th Ed, 2004) states that the general rule that acceptance has no effect until it is communicated to the offeror may be waived by the terms of the offer, for example where an offer invites acceptance by conduct (Para 2-045). The Agreement (between XYZ and ABC) states:

By clicking on the 'I have read and agree to the terms of the User Agreement' checkbox on the website and thereafter utilizing the site or the XYZ Service…you hereby agree to be legally bound by this agreement.

Thus the last act necessary to create a binding agreement between ABC and XYZ is ABC clicking the checkbox, which was performed in Australia.

In our view, notwithstanding that the software is located on ABC's server in the Country Q, the supply of access by ABC to XYZ may be connected with Australia as being a thing done in Australia either on the basis that there is a supply of a service and the relevant software was developed in Australia or on the basis that that supply was made under an agreement and the last act necessary to create a binding agreement between ABC and XYZ was performed in Australia.

GST-free supply:

As all the requirements of section 9-5 of the GST Act are satisfied, the supply of access by ABC to XYZ is a taxable supply. However section 9-5 also provides that a supply is not a taxable supply to the extent that it is GST-free.

Division 38 of the GST Act sets out the GST-free supplies, including Item 2 in subsection 38-190(1) which provides that a supply of a thing other than goods or real property is GST-free where that supply is made to a non-resident who is not in Australia when the thing supplied is done and the non-resident acquires the thing in carrying on the non-resident's enterprise but is not GST registered or required to be so registered.

Goods and Services Tax Ruling GSTR 2004/7 states that a supply is made to a non-resident for the purposes of Item 2 if the supply is made to an entity that is not a resident of Australia for the purposes of the Income Tax Assessment Act 1936 ('TAA') (para 23). An incorporated entity such as XYZ is 'resident' as defined in section 6 of the TAA if it is incorporated in Australia or carries on business in Australia while having its central management and control in Australia or its voting power controlled by Australian resident shareholders. XYZ's webpage indicates that XYZ is incorporated in the Country Q and ABC advised that XYZ does not have any Australian presence. We therefore consider that XYZ is a non-resident for the purposes of Item 2.

We also consider that XYZ is not 'in Australia' for the purposes of Item 2. GSTR 2004/7 states that this is a proxy test for where the supply made by ABC to XYZ is consumed (para 181) and that a recipient is not in Australia if the recipient is not in Australia in relation to the supply (Para 185). A non-resident company is considered to be 'in Australia' in relation to a supply only if that company carries on business or activities in Australia either at or through a fixed or definite place of its own for a sufficiently substantial period of time or through an agent at a fixed and definite place for a sufficiently substantial period of time (GSTR 2004/7, para 241). ABC advised that XYZ does not have an Australian presence. We therefore consider that XYZ is not 'in Australia' in relation to the supply made by ABC.

Paragraph (b) in Item 2 in subsection 38-190(1) requires that XYZ acquires the access in carrying on XYZ's enterprise and that XYZ is neither GST registered nor required to be so registered. We consider that XYZ acquires the access in carrying on XYZ's enterprise because XYZ's webpage describes XYZ's enterprise as reselling software products, including handling all aspects of purchasing and delivery, licensing and activation. In relation to whether XYZ is GST registered, we have searched the ABN Register and cannot find an ABN for XYZ.

Nor do we consider that XYZ is liable to register for GST. An entity is required to register for GST if its GST turnover meets the registration turnover threshold (i.e. $75,000), but paragraphs 188-15(3)(a) and 188-20(3)(a) of the GST Act allow that entity to disregard any supply that is not connected with Australia when calculating its current or projected turnover.

We doubt that a supply made by XYZ to a purchaser is connected with Australia under the tests in subsection 9-25(5) of the GST Act. Such a supply would not be a thing 'done in Australia' because the discussion in GSTR 2000/31 (paras 71-72) of a supply of advice or information which the supplier has had to create and then provide to the recipient being done where the advice was created would not apply because XYZ does not create the software but merely resells it. In our view the discussion in GSTR 2000/31 (para 73) of an instantaneous supply of advice or information would apply to a supply made by XYZ to a purchaser, in which case the thing is done where the advice or information is provided (i.e. in the Country Q where XYZ and XYZ's servers are located). We note that Chapter 4 of the Electronic Commerce Industry Partnership Issues Register states that where virus protection software is purchased from a Country Q owned and controlled corporation and downloaded from servers located in the Country Q the supply is not connected with Australia under subsection 9-25(5) of the GST Act as it is not a thing done in Australia.

We doubt that a supply made by XYZ to a purchaser would be connected with Australia under paragraph 9-25(5)(b) of the GST Act, i.e. made through an enterprise that XYZ carries on in Australia. Subsection 9-25(6) of the GST Act provides that an enterprise is carried on in Australia if the enterprise is carried on through a 'permanent establishment' as defined in subsection 6(1) of the TAA or through a place that would be a permanent establishment if the exclusions in paragraphs (e), (f), or (g) of that definition did not apply. The 'permanent establishment' definition includes, in relation to a person, a place at or through which the person carries on any business and includes a place where the person is carrying on business through an agent. Taxation Ruling TR 2002/5 states (paras 29-30)

A place at or through which a person carries on any business in the context of the definition of PE in subsection 6(1) must be geographically permanent. Any area, viewed commercially and as a whole, may, in relation to the business concerned, be a place.

The second criteria for a place at or through which a person carries on any business to exist for the purposes of the definition of PE in subsection 6(1) is temporal permanence, i.e. the business presence must not be of a purely temporary nature. In other words, the business must operate at that place for a period of time. Again, this has to be judged in the context of the particular business and is a question of fact and degree.

The relevant web pages indicate that XYZ carries on business in the Country Q and ABC advised that XYZ does not have an Australian presence. We note that XYZ may carry on an enterprise in a country in which a server used by XYZ is located provided certain conditions are met. The OECD Model Tax Convention on Income and Capital (Condensed Version, July 2008) ('Convention') states in the Commentary on Article 5 - 'Permanent Establishment' (Para 42.2) that a location where automated equipment is operated by an enterprise may constitute a permanent establishment in the country where that equipment is situated and that a computer server

…is a piece of equipment having a physical location and such location may thus constitute a 'fixed place of business' of the enterprise that operates that server.

The Convention also states that where the electronic commerce operations carried on through the computer equipment form an essential and significant part of the enterprise (e.g. in the case of an e-tailer, the typical functions related to a sale such as the conclusion of the contract with the customer), the computer equipment would constitute a permanent establishment (Para 42.8). ABC advised that XYZ's servers are located in the Country Q.

In our view XYZ's supplies are not connected with Australia and are excluded when determining whether XYZ meets the registration turnover threshold. Consequently XYZ is not liable to register for GST and the requirements of Item 2(b) in subsection 38-190(1) of the GST Act in order for a supply of access made by ABC to XYZ to be GST-free are satisfied.

Subsection 38-190(3):

Subsection 38-190(3) of the GST Act provides that a supply which meets the requirements of Item 2 in subsection 38-190(1) is nevertheless not GST-free if it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident and the supply is provided, or the agreement requires it to be provided, to another entity in Australia.

Goods and Services Tax Ruling GSTR 2005/6 explains the operation of subsection 38-190(3) by reference to an Example in the Explanatory Memorandum to the A New Tax system (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999:

60. In that example, non-resident parents contract for the supply of education services to be provided to their children in Australia. The contractual flow of the services is to the parents, while the actual flow of the services is to the children. The supply is made to the parents (non-residents) and provided to another entity, each child, in Australia.

Thus even if the supply of access by ABC to XYZ is GST-free under Item 2(b) in subsection 38-190(1), that supply may nevertheless not be GST-free if ABC provides that access to another entity in Australia (e.g. an Australian purchaser). GSTR 2005/6 states that

261. Correct characterisation of the supply is very important. Only when the supply covered by item 2 is properly characterised as a supply of a service, right or some other thing, is it possible to determine whether that supply is provided to another entity in Australia.

XYZor the reasons already set out above based on GSTR 2003/8 (paras 89-93), we consider that the supply made by ABC is properly characterised as a service.

GSTR 2005/6 states:

285. In situations where the contractual flow of the supply is to an entity (other than an individual), and it is necessary to determine whether the actual flow of the supply is to another entity (other than an individual), we consider that a strong indicator that the supply is provided to another entity is that the contracting entity has no further interaction with, or participation in, the provision of the supply beyond contracting and paying for the supply. However, the application of subsection 38-190(3) is still dependent upon on all the facts and circumstances of the supply. Refer to Examples 5 (paragraphs 314 to 322) and 33 (paragraphs 580 to 587), Parts II and VI respectively of the Explanation section of this Ruling.

In the present case the contracting entity (i.e. XYZ) does have interaction with or participation in the provision of the supply beyond paying for the supply. The XYZ store webpage indicates that if a purchaser encounters a problem with access to the software the purchaser contacts XYZ and that a purchaser directs billing and returns queries to XYZ. ABC advised that a purchaser deals with XYZ (and XYZ's server alerts ABC's server) to both create and close an account for that purchaser. Thus we do not consider that XYZ merely contracts and pays for the supply made by ABC which ABC provides to the purchaser and we do not consider that the supply of access made by ABC to XYZ under the Agreement is taxable under subsection 38-190(3) of the GST Act.

Supply made by XYZ to the purchaser:

Our conclusion that XYZ does not act as ABC's agent means that there are two supplies of access to the software - one from ABC to XYZ and another from XYZ to the Australian purchaser.

This part of this ruling deals with the supply by ABC to XYZ. We have not been asked to rule on whether the supply of access by XYZ to the Australian purchaser is subject to GST, although in relation to the requirement in Item 2(b) in subsection 38-190(1) that XYZ is not required to register for GST (see above) we discussed whether the supply of access by XYZ to an Australian purchaser is connected with Australia. Relying on Chapter 4 of the Electronic Commerce industry Partnership Issues Register and based on ABC's advice that XYZ does not have an Australian presence and XYZ's servers are located in the Country Q, we concluded that the supply of access by XYZ to an Australian purchaser is not connected with Australia.

Question 2 - purchaser outside Australia

Summary:

As XYZ does not act as ABC's agent, ABC supplies that access to XYZ and XYZ then supplies that access to the purchaser. The supply of access by ABC to XYZ is GST-free.

Detailed reasoning:

XYZ or the reasons set out above in relation to Question 1 we consider that XYZ does not act as ABC's agent.

Consequently, where a purchaser who is outside Australia purchases access to the software via XYZ's online store, ABC supplies that access to XYZ and XYZ then supplies that access to the purchaser. For the reasons set out above in relation to Question 1, we consider that the supply of access by ABC to XYZ is GST-free pursuant to Item 2(b) in subsection 38-190(1) of the GST Act.