| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012276667122
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: GST and goods bought and sold overseas
Question 1
Is GST applicable on goods sold to an Australian client where the goods were offshore?
Answer
No.
Relevant facts and circumstances
You are registered for GST. You plan to buy some goods from an overseas supplier with offshore price term and sell these goods to an Australian client when the goods are still offshore (without entering Australia) with offshore price term.
The client is responsible for sea freight and importation. The client pays for sea freight, customs clearance, and also GST when clearing customs to the client's logistic supplier. The client uses your invoice amount to pay GST when clearing customs.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5.
A New Tax System (Goods and Services Tax) Act 1999 section 9-25.
Reasons for decision
Summary
The sale of the goods is not connected with Australia and therefore is not drawn into the GST system.
Detailed reasoning
To be a taxable supply for GST purposes, your sale of goods should meet the requirements of section 9-5 of the A New Tax System (Goods and Services) Tax Act 1999 (GST Act):
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.
In particular, as per paragraph 9-5(c) above, the sale of the goods is required to be 'connected with Australia'. A supply of goods to Australia is connected with Australia if it meets the requirements of subsection 9-25(3) of the GST Act:
(3) A supply of goods that involves the goods being brought to Australia is connected with Australia if the supplier either:
(a) imports the goods into Australia; or
(b) installs or assembles the goods in Australia.
Your supply of goods overseas does not meet the requirements as you (the supplier) do not import the goods into Australia, nor do you assemble or install the goods in Australia.
As your supply of goods is not connected with Australia, it does not meet the requirements of section 9-5 of the GST Act. Your supply is not subject to GST.