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Ruling
Subject: GST and export of services
Question
Are you making a GST-free supply when you supply the consulting services to an overseas entity?
Answer
Yes, you are making a GST-free supply when you supply the consulting services to the overseas entity.
Relevant facts and circumstances
You are registered for Goods and Services Tax (GST)
You provide consulting services to various domestic and overseas entities as part of your enterprise.
In this case, all the consulting services will be provided at an overseas location.
One consultant will be required to make few visits to the overseas entity to provide the consulting services.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 38-190.
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-190(1).
Reasons for decision
Under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), certain supplies of things other than goods or real property, for consumption outside Australia, are GST-free. As the supply being made by you is not a supply of goods or real property, the GST status of the supply is appropriately considered under section 38-190 of the GST Act.
Under paragraph (a) of item 2 in the table in subsection 38-190(1), a supply is GST-free where:
§ it is made to a non-resident who is not in Australia when the thing supplied is done; and
§ it is not a supply of work physically performed on goods situated in Australia when the work is done; and
§ it is not a supply directly connected with real property situated in Australia.
You stated that your consultant will make few visits to the overseas entity to provide the consulting services. The supply of consulting services will be made to a non-resident who will be not in Australia at the time of this supply.
Furthermore, the service you provide is not a supply of work physically performed on goods situated in Australia. Neither is the supply directly connected with real property situated in Australia. Therefore, you are making GST-free supplies under paragraph (a) of Item 2 in the table in subsection 38-190(1) of the GST Act, when you supply the consulting services to the overseas entity.