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Ruling
Subject: Goods and services tax (GST) and sale of diesel imported from overseas
Question
Will GST be payable on your sale of diesel to your customer?
Answer
Yes.
This ruling applies for the following periods:
The scheme commences on:
Relevant facts and circumstances
You are registered for GST.
You will sell diesel to your customer. The diesel will be imported from overseas into Australia.
You will arrange for the diesel to be brought from overseas to Australia.
Your customer will deal with the Customs formalities.
You will deliver the diesel to a customer owned certain installation and mine oil storage tanks in a place in Australia.
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 subsection 9-25(1)
A New Tax System (Goods and Services Tax) Act 1999 section 9-40
A New Tax System (Goods and Services Tax) Act 1999 section 13-5
Reasons for decision
Summary
GST will be payable by you on your sale of diesel to your customer as you will satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Detailed reasoning
GST is payable by you on your taxable supplies.
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:
you make the supply for *consideration; and
the supply is made in the course or furtherance of an *enterprise that
you *carry on; and
the supply is *connected with Australia; and
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)
You will satisfy the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(d) of the GST Act. That is, you will make a supply for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, you are registered for GST. There are no provisions in the GST Act under which your supply will be GST-free or input taxed.
Therefore, what remains to be determined is whether your supply will be connected with Australia.
In accordance with paragraph 45 of Goods and Services Tax Ruling GSTR 2000/31, a supply of goods is connected with Australia under subsection 9-25(1) of the GST Act if the supplier delivers the goods in Australia to the purchaser.
You will supply diesel to your customer. You will deliver the diesel in Australia to your customer - you will deliver the diesel to a customer owned certain installation and mine oil storage tanks in a place in Australia. Therefore, your supply of diesel to your customer will be connected with Australia under subsection 9-25(1) of the GST Act under the circumstances you have set out. Hence, you will satisfy the requirement of paragraph 9-25(c) of the GST Act.
As you will satisfy all of the requirements of section 9-5 of the GST Act, you will make a taxable supply of the diesel to your customer. Therefore, GST will be payable by you on this supply.
(You mentioned paragraphs 99 to 103 of Goods and Services Tax Ruling GSTR 2003/15. These paragraphs deal with the imposition of GST on importations. These paragraphs are not relevant to the GST issue you have raised as you have asked whether GST is payable on your sale of the diesel; not whether GST is payable on the importation.
It is possible for GST to be payable to Customs on an importation of particular goods and for GST to be payable to the Australian Taxation Office on a sale of the goods as well.
Whether or not GST is payable on the importation of particular goods will not determine whether GST is payable on the sale of those goods. Whether GST is payable on the importation of goods depends on whether the requirements of section 13-5 of the GST Act are satisfied. Whether GST is payable on a sale of goods depends on whether the requirements of section 9-5 of the GST Act are satisfied).