Edited version of your written advice

Authorisation Number: 1051388126888

Date of advice: 21 June 2018

Ruling

Subject: GST and arranging transport of animals from Australia to an overseas country

Question 1

Are you making a GST-free supply under section 38-355 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when arranging for the transport of animals from Australia to an overseas destination?

Advice

Where the owner of the animal is a non-resident of Australia and is not in Australia at the time the supply is done, your supply of arranging for the transport of the animal from Australia to an overseas destination to the owner is GST-free under item 7 in the table in subsection 38-355(1) of the GST Act.

Where the owner of the animal (resident or non-resident of Australia) is in Australia at the time the supply is done, your supply of arranging for the transport of the animal from Australia to an overseas destination to the owner is GST-free under item 7 in the table in subsection 38-355(1) of the GST Act.

Relevant facts

You are in the business of providing pet transportation services and are registered for GST. Under your Pet Transportation Terms and conditions, the owner of the animal will enter into an agreement with you for the acquisition of your services.

You provide transport of domestic animals such as dogs, cats, rabbits, guinea pigs via Road and Air both domestically and internationally. Depending on the location of the animal you book domestic and international flights for the overseas transport.

The International side of your business is supply of domestic animals to people who reside overseas. The person receiving the animal is not in Australia. You deal directly with that person and they pay you.

Sometimes you deal with the breeder of the animal. The breeder of the animal is the owner of the dog and the overseas person has purchased the animal from the breeder. You invoice the breeder for your services.

The client can also be in Australia at the time but relocating overseas. You have no idea of the official residential status of the person at the time of the supply.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 38-355

Reasons for decision

Note: Where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in section 195-1 of the GST Act.

Detailed reasoning

Subsection 38-355(1) of the GST Act provides when a supply of transport and related matters is GST-free.

Relevant to your arranging of the transportation of animals to an overseas destination is item 7 in the table in subsection 38-355(1) of the GST Act (item 7).

Item 7 provides that subject to subsection 38-355(3) of the GST Act, the arranging of transport will be GST-free where the supply of arranging the international transport of goods is covered by item 5 in the table in subsection 38-355(1) of the GST Act (Item 5).

Subsection 38-355(3) of the GST Act

Subsection 38-355(3) of the GST Act provides that items 5 and 5A, paragraphs (b) to (d) of item 6, and paragraphs (b) to (c) of item 7 in the table in subsection 38-355(1) of the GST Act do not apply to a supply to the extent that:

a) the supply is or relates to the international transport of goods; and

b) the supplier is a redeliverer that is treated as the supplier of the goods under subsection 84-81(4) of the GST Act; and

c) the supply of the good is a taxable supply.

Item 5

Item 5 provides that subject to subsections 38-355(2) and 38-355(3) of the GST Act, the international transport of goods from their place of export in Australia to a destination outside Australia is GST-free under paragraph (a) of item 5.

Subsection 38-355(2) of the GST Act

Subsection 38-355(2) of the GST Act provides that paragraphs (a) and (b) of item 5, and item 5A, in the table in subsection (1) do not apply to a supply to the extent that the thing supplied is done in Australia, unless

a) The recipient of the supply is a non-resident and is not in Australia when the thing supplied is done in Australia; or

b) The supply is done by the supplier of the transport of the goods from or to Australia (whichever is relevant).

This means either paragraph (a) or (b) in subsection 38-355(2) of the Act must be satisfied for the supply to be GST-free under paragraph (a) in item 5.

From the facts given the owner is either located outside or in Australia at the time you organise for the transportation of the animal to an overseas destination.

Owner of animal located overseas

Where the owner of the animal is a non-resident of Australia and located overseas at the time you organise for the transportation of the animal, paragraph (a) in subsection 38-355(2) of the GST Act is satisfied. In this instance the transportation of the animal to the overseas person is GST-free under item 5.

Accordingly, in this case your supply of arranging the transportation of the animal to an overseas destination is therefore GST-free under item 7.

Owner of animal located in Australia

Paragraph (a) in subsection 38-355(2) of the GST Act requires that the recipient of the supply is a non-resident and is not in Australia at the time the thing supplied is done.

Where the owner of the animal (resident or non-resident of Australia) is located in Australia at the time you organise for the transportation of the animal. Paragraph (a) in subsection 38-355(2) of the GST Act is not satisfied.

You are responsible to book the flight for the animal to be taken overseas and confirm the paperwork with the airline. In this instance you are considered to be the supplier of the transport of the animal to the overseas destination. Paragraph (b) in subsection 38-355(2) of the GST Act is satisfied.

In this case your supply to the owner (resident and non-resident) located in Australia is GST-free under item 7 in the table in subsection 38-355(1) of the GST Act.