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Edited version of your written advice
Date of Advice: 4 April 2017
Ruling
Subject: GST and a supply of sales representative services to non-residents
Question
Is your supply of sales representative services to a non-resident entity in return for the commission subject to goods and services tax (GST)?
Answer
No, the supply of your sales representative services to the non-resident entity in return for the commission is GST-free.
Based on the information provided your supply of sales representative services to 3teh non-resident entity will be GST-free under paragraph (a) of Item 2 in the table in subsection
38-190(1) of the GST Act as:
You are supplying services, and not goods or real property,
Your supply is not work physically performed on goods in Australia nor directly connected with real property situated in Australia,
Your supply is to a non-resident who is not in Australia when your services are performed (done),
There is no agreement for you, nor are you providing your services to another entity in Australia.
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You are a sole trader and are registered for GST. You provide sales representative services to entities in Australian and overseas.
You have a sales representative agreement with the non-resident entity to act as a sales representative to market and obtain orders for their products in Australia.
The non-resident entity is based overseas and not registered for GST in Australia.
The non-resident entity sells various products to Australian retail stores in Australia.
You market and obtain orders for the products in Australia in your assigned territory. Your services include marketing the products, placing orders with, and co-ordinating supplies and orders with the non-resident entity. You receive a commission from the non-resident entity for sales shipped monthly of its products.
The non-resident entity is not in Australia when the supply of your sales representative services provided.
You have no authority to enter into any contracts with the Australian retailers in Australia on behalf of the non-resident entity.
The non-resident entity is not in Australia in relation to your supply of the services, nor do they have any other representatives acting on their behalf in Australia in relation to those services.
Under the agreement, you purchase the product samples from the non-resident entity. All sample orders are shipped twice a month.
You advised us that you do not resell the products. You use the products yourself or give them to your friends and families.
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 38-190
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)
The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.