Edited version of your written advice

Authorisation Number: 1051473346994

Date of advice: 14 January 2019

Ruling

Subject: GST and purchase and onselling of wine located in Australia

Question 1

Will the acquisition of wine by an overseas company from a GST registered Australian supplier constitute a creditable acquisition under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

The acquisition of wine by an overseas company from a GST registered Australian supplier will be a creditable acquisition under section 11-5 of the GST Act where the overseas company is required to be registered for GST or chooses to register for GST in the event it is not required to be registered for GST.

Question 2

Will the supply of wine by the overseas company to the foreign distributor constitute a GST-free supply for the purposes of item 1 of subsection 38-185(1) and/or subsection 38-185(3) of the GST Act?

Answer

Where the overseas company is not required to be registered for GST and does not choose to register for GST, its supply of wine to the foreign distributor is outside the scope of the Australian GST.

Where the overseas company is required to be registered for GST or chooses to register for GST in the event it is not required to be registered for GST, its supply of wine to the foreign distributor will be GST-free under item 1 in the table in subsection 38-185(1) of the GST Act where all of the following are satisfied:

● All requirements (excluding paragraph (f)) in subsection 38-185(3) of the GST Act are met; and

● The overseas company obtains documentary evidence of the export of the wine within the 60 day period or the documentary evidence is obtained after the end of the 60 day period and before the due date for lodgement of its next BAS.

Relevant facts

You are a non-resident entity that is not registered for the goods and services tax (GST) and located outside Australia. Your business activity consists of purchasing wine and onselling the purchased wine.

The annual turnover for your sale of wine that is to be exported from Australia would be A$75,000.

You have purchased wine from a GST registered Australian supplier on varied ex work Incoterms (EXW Incoterms).

You resell the purchased wine to a foreign distributor, a non-resident that carries on its business activity outside Australia. The foreign distributor is not registered for GST.

The EXW Incoterms you have with the Australian supplier have been amended so that the title of the wine transfers from the Australian supplier to you at the supplier’s warehouse and the supplier is named as the exporter of the wine from Australia on the export declaration in accordance with section 113 of the Customs Act 1901 (CTH), with export documents generated by the supplier prior to the foreign distributor collecting the wine for delivery.

There is no contractual relationship between the Australian supplier and the foreign distributor. The Australian supplier has a contractual relationship with you. The exporter will be the Australian supplier who will be listed on the certificate of origin. The foreign distributor will be the importer into the foreign country, will provide the bill of lading as proof of export and will be listed as importer in the foreign country on the bill of lading.

The Australian supplier issues an invoice to you at the time the wine is made available to you. Your order to the Australian supplier is based on the order you receive from the foreign distributor.

Once you receive titles of the wine from the supplier, you will inform the foreign distributor that the wine is available for collection from the Australian supplier’s warehouse. The foreign distributor’s freight service will collect the wine. In no circumstances will the wine be reimported into Australia after you have sold it to the foreign distributor.

Whilst the Australian supplier is exporting the wine, it is preferable from a commercial perspective that freight is co-ordinated by the foreign distributor as the ultimate recipient of the wine. As the foreign distributor may acquire Australian wine from multiple suppliers, this allows for its shipments to be consolidated, thus minimising shipping costs. The foreign distributor will contract for the international freight at its own expense.

The foreign distributor will export the wine within 60 days of the earlier of the receipt of an invoice or consideration being provided to you.

You consider that the foreign distributor will satisfy all the requirements in subsection 38-185(3) of the GST Act as followed:

a) You supply the wine to the foreign distributor which is not registered or required to be registered for GST. Requirement in paragraph (a) is satisfied.

b) Whilst the foreign distributor will not be the named exporter, you submit the foreign distributor will more clearly satisfy the Commissioner’s interpretation of ‘export’ in GSTR 2002/6. Unlike you, the foreign distributor is contracting for the international freight at its own expenses which directly aligns with the Commissioner’s test at paragraph 22(a) in GSTR 2002/6. On this basis you submit the foreign distributor should be regarded to export the goods for GST purposes. Requirement in (b) is therefore satisfied.

c) The Australian supplier will complete an entry for the export of the wine, the goods will be entered for export as required by section 113 of the Customs Act 1901 (CTH). Accordingly requirement (c) is satisfied.

d) The foreign distributor does not alter or use the wine in anyway. The requirement (d) is satisfied.

e) The foreign distributor will supply you with the relevant commercial documents to evidence the goods were exported once completed, including, but not limited to the seaway bill, certificate of shipment and/or export declaration. Requirement (e) is therefore satisfied.

f) The foreign distributor is not a resident of an Australian external territory and as such paragraph 38-185(3)(f) does not apply.

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 38-185

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.

Question 1

You make a creditable acquisition under section 11-5 of the GST Act if:

a) you acquire anything solely or partly for a creditable purpose; and

b) the supply of the thing to you is a taxable supply; and

c) you provide or are liable to provide consideration for the supply; and

d) you are required or required to be registered for GST.

From the facts given you satisfy paragraphs (a) and (c) in section 11-5 of the GST Act as you purchase the wine for business purposes and you are liable to pay for the supply of wine made to you.

Next is to consider paragraphs (b) and (d) in section 11-5 of the GST Act.

Paragraph 11-5 (b) of the GST Act

GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if:

a) the supplier makes the supply for consideration; and

b) the supply is made in the course or furtherance of an enterprise carried on by the supplier; and

c) the supply is connected with Australia; and

d) the supplier is registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

From the information given, the GST registered supplier satisfies paragraphs (a) to (d) in section 9-5 of the GST Act as:

a) the supplier makes the supply for consideration; and

b) the supply is made in the course of a business that the supplier carries on; and

c) the supply of the wine is connected with Australia as the wine is made available to you at the supplier’s warehouse which is located in Australia; and

d) the supplier is registered for GST.

However, the supply of wine is not a taxable supply to the extent that it is GST-free or input taxed.

There is no provision under the GST Act that will make the supply of wine input taxed.

GST-free supply

Relevant to the supply of wine is item 1 in the table in subsection 38-185(1) of the GST Act (item 1).

Under item 1 a supply of goods is GST-free only if the supplier exports them from Australia before or within 60 days (or such further period as the Commissioner allows) after:

● the day on which the supplier receives any of the consideration for the supply; or

● if, on an earlier day, the supplier gives an invoice for the supply – the day on which the supplier gives the invoice.

Goods and Services Tax Ruling GSTR 2002/6 provides guidance on when a supply of goods is a GST-free export of goods.

Paragraph 30 in GSTR 2002/6 states that where goods which are being exported are sold and resold in a series of transactions, each supply in the chain is examined individually. Where a supply of goods in that chain is connected with Australia the criteria outline in paragraph 22 for identifying if a supplier exports for the purposes of item 1 are applied to that supplier.

Accordingly, the sale of wine by the supplier to you is to be examined separately from your sale to the foreign distributor.

For a supplier to treat their supply of goods as a GST-free export of goods under item 1 there must be:

● an export of goods; and

● the supplier is the entity that exports them within the 60 days; and

● the supplier must hold evidence that the goods have been exported – for example a clear export declaration and a valid transport document issued by a shipping line or airline showing that the goods were received by a shipping line or aircraft operator and that the ship or airline has been contracted to carry the goods to a destination outside Australia.

The word ‘export’ is not defined in the GST Act and therefore it takes its ordinary meaning of sending goods to other countries or places for sale or exchange, or taking goods out of one county with the intention of landing them in another country.

Paragraph 97 in GSTR 2002/6 states that for the purposes of section 38-185 of the GST Act, to export goods is to physically send or take goods out of Australia with the intention that the goods be landed at a place outside Australia.

Regarding ‘supplier exports’ paragraphs 106 to 109 and 125 in GSTR 2002/6 state:

106. The question of whether the supplier exports, that is, whether the supplier sends or takes goods from Australia, is answered by examining the role the supplier plays in bringing about the removal of the goods from Australia.

107. The supplier is the exporter for the purposes of item 1 or 2, if the part played by the supplier in bringing about the removal of the goods from Australia is sufficient to justify the supplier being described as the sender of those goods out of Australia.

108. The policy intent for requiring the supplier to export is to ensure that the goods are not used or consumed in Australia. If the supplier exports the goods, the supplier then knows that the goods are not used or consumed in Australia, and the goods can be supplied GST-free.

109. Against this policy background, we consider that the role of the supplier is sufficient to justify describing the supplier as the entity that exports goods from Australia, where:

a) the supplier contracts at the supplier's own expense with an international carrier for the transportation of the goods to a destination outside Australia; or

b) the supplier is responsible for delivering the goods to the operator of a ship or aircraft who, or that, has been engaged by another party to transport those goods to a destination outside Australia.

110. This approach recognises that the supplier has put the goods into a position which means that the goods are for export and not for use or consumption in Australia. Also, in each case, it is the acts of the supplier alone which determine whether the supplier satisfies the primary element of a GST-free export (i.e., 'the supplier exports'). The supplier has access to documents which evidence the particular acts which the supplier carried out in sending the goods overseas

125. Where a supplier is only responsible for delivery of the goods at a place inside Australia and to a person in Australia who, or that, is not a ship or airline operator, the supplier is not considered to be the exporter. This is the case under an Ex-works (EXW) or Free Carrier (FCA) contract of sale where the supplier is only required to deliver the goods either at the supplier's own premises, or to a carrier, other than a ship or aircraft operator, named by the buyer. The named carrier may be an agent of the buyer, a freight forwarder, consolidator, or any other third party who, or that, is not a ship or airline operator contracted to carry the goods to an overseas destination. If the supplier is not the exporter, the supply is not GST-free under item 1 or 2 unless the requirements of subsection 38-185(3) are met (see paragraphs 237 to 294).

From the facts given, the wine is made available to you in Australia and the title of the wine will be transferred to you at the supplier’s warehouse. You onsell the purchased wine to a foreign distributor who will collect the wine from the supplier’s warehouse after the change of title is made to you.

In this instance there is no export of wine made to you since the wine you purchased from the supplier has never left Australia. The supplier has not exported the wine and instead has made the wine available to you in their warehouse and which you onsell and deliver to the foreign distributor at the supplier’s warehouse. Further, the Australian supplier is not required to deliver the goods on board a ship as the wines are delivered to the freight company contracted by the foreign distributor at the supplier’s warehouse.

Subsection 38-185(3) of the GST Act does not apply as you do not export the wine since the wine you have purchased is sold to the foreign distributor and collected at the supplier’s warehouse by the freight company contracted by the foreign distributor. The foreign distributor is responsible to organise for the shipping of the purchased wine.

Accordingly, the supply of wine made to you is not a GST-free export of wine since the requirements in item 1 are not satisfied.

The supply of wine made to you by the supplier is a taxable supply under section 9-5 of the GST Act.

Paragraph 11-5(d) of the GST Act

Under section 23-5 of the GST Act you are required to be registered for GST if you are carrying on an enterprise and your GST turnover meets the GST registration turnover threshold which currently is A$75,000 (A$150,000 for non-profit organisation).

Under section 23-10 of the GST Act you may choose to register for GST if you are carrying an enterprise and your GST turnover does not meet the GST registration turnover threshold.

Under paragraphs 188-15(3)(d) and 188-20(3)(d) of the GST Act, any GST-free supply made by a non-resident that does not make the supply through an enterprise that the non-resident carries on in Australia is disregarded when calculating the current and projected GST annual turnover for GST registration purposes.

From the facts given the wine you onsell to the foreign producer is made available to the foreign producer in Australia. In this instance your sale of wine to the foreign producer is connected with Australia under subsection 9-25(1) of the GST Act.

You advised that the sale of wine that is located in Australia and to be exported from Australia is above A$75,000. In this instance you have reached the GST registration threshold. However since the sale is made from a business located outside Australia you need to determine whether the sale of the wine that is located in Australia and will be exported to a destination outside Australia is GST-free.

If the sale of wine is a taxable supply, the turnover for this sale is included when calculating the annual GST turnover for GST registration purposes. Where the turnover for these taxable supplies is A$75,000 or more you will be required to be registered for GST. In this case paragraph11-5(d) of the GST Act is satisfied.

If your sale of wine is a GST-free export supply of wine, the turnover for the sale is included when calculating the annual GST turnover for GST registration purposes since the sale is made from a business located outside Australia. If you are not required to be registered for GST paragraph 11-5(d) of the GST Act is not satisfied and the acquisition is outside the scope of GST.

However, you can choose to register for GST where you are not required to be registered for GST if you would like to claim back the GST paid on the taxable supplies made to you by the Australian supplier.

Summary

Your acquisition of wine from the GST registered supplier is a creditable acquisition under section 11-5 of the GST Act to the extent that you are required to be registered for GST or you choose to register for GST in the event you are required to be registered for GST.

Question 2

When you sell your wine to the foreign distributor your supply satisfy paragraphs 9-5(a) to 9-5(c) of the GST Act as:

a) you make the supply for consideration

b) the supply is made in the course of a business that you carry on;

c) the supply is connected with Australia as the wine is made available to the foreign distributor in Australia.

We will now consider the remaining requirements for a taxable supply under section 9-5 of the GST Act.

Paragraph 9-5(d) of the GST Act

If you are not required to be registered for GST and do not choose to register for GST this paragraph is not satisfied. Your supply of wine to the foreign distributor is outside the scope of GST.

If you are required to register for GST or choose to register for GST, this paragraph is satisfied. Your sale of wine is a taxable supply to the extent that it is not GST-free or input taxed.

Input taxed supply

There is no provision under the GST Act that will make your supply input taxed.

GST-free supply

Relevant to the supply of wine made to the foreign distributor is item 1 in the table in subsection 38-185(1) of the GST Act (item 1).

Under item 1 a supply of goods is GST-free only if the supplier exports them from Australia before or within 60 days (or such further period as the Commissioner allows) after:

● the day on which the supplier receives any of the consideration for the supply; or

● if, on an earlier day, the supplier gives an invoice for the supply – the day on which the supplier gives the invoice.

Goods and Services Tax Ruling GSTR 2002/6 provides guidance on when a supply of goods is a GST-free export of goods.

For a supplier to treat their supply of goods as a GST-free export of goods there must be:

● an export of goods; and

● the supplier is the entity that exports them within the 60 days; and

● the supplier must hold evidence that the goods have been exported – for example a clear export declaration and a valid transport document issued by a shipping line or airline showing that the goods were received by a shipping line or aircraft operator and that the ship or airline has been contracted to carry the goods to a destination outside Australia.

The requirement that the supplier is the entity that exports the goods is satisfied where either:

a) the supplier contacts at the supplier’s own expense with an international carrier for the transportation of the goods to a destination outside Australia; or

b) the supplier is responsible for delivering the goods to the operator of a ship or aircraft who, or that, has been engaged by another party to transport those goods to a destination outside Australia; or

c) the requirements of subsection 38-185(3) of the GST Act are met.

A supplier does not export goods where the supplier’s responsibility only extend to delivering the goods in Australia to a person who is not the operator of a ship or aircraft engaged to carry them out of Australia. A supplier does not export under a contract of sale with FCA terms where the carrier to whom the goods are delivered, is not the operator of a ship or aircraft, for example a freight consolidator.

From the facts given you have not exported the goods as you have made the goods available to the foreign distributor at the supplier’s warehouse. Further you have not contracted at your expense with an international carrier for the transportation of the wine to a destination outside Australia and you do not have to deliver the wine to the operator of a ship or aircraft that has been engaged by the foreign distributor to transport those goods to a destination outside Australia.

However, you may still be the exporter of the wine where the foreign distributor exports the wine and the requirements in subsection 38-185(3) of the GST Act are met.

Subsection 38-185(3) of the GST Act

Under subsection 38-185(3) of the GST Act a supplier who has not exported goods is treated as having exported them for the purposes of item 1 if the requirements in subsection 38-185(3) of the GST Act are met. The requirements are:

a) before the goods are exported, the supplier supplies them to an entity that is not registered or required to be registered,

b) that entity exports the goods from Australia,;

c) the goods have been entered for export within the meaning of section 113 of the Customs Act;

d) since their supply to that entity, the goods have not been altered or used in any way, except to the extent (if any) necessary to prepare them for export,

e) the supplier has sufficient documentary evidence to show that the goods were exported; and

f) if that entity is covered by paragraph 168-5(1A)(c) - the supplier has a declaration by that entity stating that:

i. a payment has not been sought under section 168-5 for the supply; and

ii. if the goods are wine - a payment has not been sought under section 25-5 of that Act for the supply.

However, if the goods are reimported into Australia, the supply is not GST-free unless the reimportation is a taxable importation.

When a supplier delivers the goods sold to the buyer or to the buyer’s representatives in Australia and relies on subsection 38-185(3) of the GST Act to treat their supply GST-free, it is the supplier’s choice to supply the goods GST-free to the buyer for export and the supplier bears the risk of the goods not being exported.

If the goods are not exported then the supplier is liable for GST. Further the supplier is liable for GST unless it has documentary evidence that the buyer is not registered or not required to be registered for GST, the goods have been exported by the buyer, the goods have not been used or altered prior to export and the goods have been entered for export.

We will now consider subsection 38-185(3) of the GST Act.

Paragraph 38-185(3)(a) of the GST Act

For the purposes of paragraph 38-185(3)(a) of the GST Act, a supplier has supplied the goods when the goods are delivered in accordance with the contract of sale. Where the contract of sale requires physical delivery to a third party who is acting for the buyer (for example, a freight forwarder, consolidator etc.) such delivery constitutes a supply to the buyer/recipient, not to the third party.

Under paragraph 38-185(3)(a) of the GST Act, it is also a requirement that the recipient of the supply is not registered, and that the recipient is not required to be registered for GST.

A supplier is able to ensure that a supplier is not registered by checking the Australian Business Register. Further the supplier must be satisfied, on reasonable grounds, that the entity it supplies to is not required to be registered. Where a supplier is not in a position to be aware of these circumstances, enquiries should be made of the recipient.

The Commissioner accepts that the supplier has reasonable grounds to be satisfied, if the entity has provided a signed written statement, declaring that the entity is not required to be registered. This is only accepted where the supplier has no reason to believe that the statement is not accurate.

You advised that the foreign distributor is not registered and is not required to be registered for GST. Where you can substantiate that the foreign distributor is not required to be registered for GST the requirement in paragraph 38-185(3)(a) is satisfied.

Paragraph 38-185(3)(b) of the GST Act

The requirement that the recipient exports the goods is satisfied where either:

a) the recipient contracts at the recipient's own expense with an international carrier for the transportation of the goods to a destination outside Australia; or

b) the recipient is responsible for delivering the goods to the operator of a ship or aircraft who, or that, has been engaged by another party to transport those goods to a destination outside Australia.

The recipient may satisfy the requirements by engaging an international transport operator, such as a freight forwarder, consolidator, air express courier or postal agency to deliver the goods to the ship or airline operator. Similarly, the recipient may enter a contract of carriage to a foreign destination through an agent, such as a freight forwarder and so on.

You advised that the foreign distributor will contract for the international freight at its own expense for the shipping of the purchased wine from you. In this instance this paragraph is satisfied.

Paragraph 38-185(3)(c) of the GST Act

Under paragraph 38-185(3)(c), the goods supplied must be entered for export within the meaning of section 113 of the Customs Act.

The Customs Act requires most goods that are to be exported to be reported to Customs on an entry for export. An entry for export is a document lodged manually or electronically with Customs that provides details of the goods to be exported and their destination. Goods are taken to be entered when Customs electronically transmits an export entry advice back to the person who lodged the export entry, or for paper entries, when a Customs officer stamps the entry as being received.

It is not necessary that it be the supplier who, or that, enters the goods for export, however, the supplier needs to be able to substantiate that the entry was made.

If the supplier has a record of the Export Declaration Number (EDN) in respect of the goods, the supplier is able to show that the goods were entered for export. If the supplier does not have an EDN, the Commissioner accepts the evidence of actual export (such as transport documents) as evidence that an export entry was lodged, provided Customs requires an export entry for the particular goods.

If you are able to substantiate that the entry for export has been made, for example you have a record of the Export Declaration Number in respect of the wine you sold or you have transport documents as evidence that an export entry was lodged for the wine you have sold this paragraph is satisfied.

Paragraph 38-185(3)(d) of the GST Act

Paragraph 38-185(3)(d) is satisfied where the goods, since their supply, have not been altered or used in any way except to the extent necessary to prepare them for export

You advised that the foreign distributor will not use or alter the wine in any way. In this instance paragraph (d) is satisfied.

Paragraph 38-185(3)(e) of the GST Act

Paragraph 38-185(3)(e) specifically requires that the supplier holds sufficient documentary evidence.

Paragraphs 279 to 282, 302 and 303 in GSTR 2002/6 state:

279. A supplier is required to have sufficient documentary evidence to show that the goods were exported. This evidence does not usually come into existence at least until the goods are in the process of being exported. Evidence that simply demonstrates that it is intended that the goods are be exported is not sufficient.

280. Where the supplier is the entity that actually exports the goods, the supplier receives evidence that shows that the goods are exported. However, where the supplier is treated as the exporter under subsection 38-185(3), the recipient is the exporting entity and the supplier will only know that the goods have been exported if the recipient provides the supplier with evidence of export. Thus, the GST law specifically requires the supplier to obtain and hold such evidence.

281. The onus is on the supplier to obtain evidence that the goods were exported. If a supplier does not obtain and hold sufficient evidence to show that the goods have been exported, that is, the goods physically have left Australia on board a ship or aircraft for landing at some place outside Australia, the supplier cannot be treated as having exported them for the purposes of item 1. The supply is not GST-free.

282. Provided that there is no information to the contrary, a supplier will have sufficient documentary evidence to show that goods were exported where the documents held by the supplier provide a reasonable basis for an independent party to conclude that the goods were exported.

302. Under items 1, 2 and 2A, to demonstrate that a supply of goods is a GST-free export, the supplier must have documentary evidence to show that the goods supplied were exported and that the supplier exported them within the specified time.

303. In most cases, the documents a supplier obtains in the ordinary course of the transaction will be sufficient, provided normal commercial procedures are followed. These documents will usually consist of:

(a) the transport documents evidencing the carriage of the goods out of Australia;

(b) the commercial documents in relation to the supply that identify the supplier, the recipient, the goods and the payment arrangements. The commercial documents should clearly link to the transport documents; and

(c) Customs and other official documents

For information on ‘what should be contained in the documents’ and ‘documentary evidence’ you can refer to paragraphs 283 to 285 and paragraphs 295 to 312 in GSTR 2002/6.

Where you obtain evidence from the foreign distributor that the goods you have sold to them are exported within the 60 day period paragraph (e) is satisfied.

Paragraph 38-185(30(f)

Paragraph (f) applies to individual who resides in an Australian external territory.

You advised that the foreign distributor is not a resident of an Australian external territory. Paragraph (f) does not apply in this instance.

Summary

Where any of the requirements in subsection 38-185(3) of the GST Act (excluding paragraph (f)) is not satisfied, for the purposes of item 1 you will not be considered to be the exporter for your sale of wine to the foreign distributor.

Where all requirements in subsection 38-185(3) of the GST Act are met, you are treated for the purposes of item 1 as the exporting entity for the wine you sold and exported by the foreign distributor. The GST-free status of your supply to the foreign distributor then depends on the other requirements of item 1 being met. For instance the export must occur with the 60 day period.

60 day period to export

Paragraphs 76 to 80 in GSTR 2002/6 state:

76. Under items 1 and 2, the export must occur within a 60 day period (or such further period as the Commissioner allows). We consider, therefore, that if the supplier obtains sufficient documentary evidence of export within the 60 day period (or such further period as the Commissioner allows for export) or if obtained after the end of this period, before the due date for lodgment of the next BAS, the requirement to have documentary evidence that the goods were exported is satisfied.

77. If the supplier is unable to obtain sufficient documentary evidence within this time frame, the requirement that the supplier has sufficient documentary evidence is not met. The supply, therefore, is a taxable supply. Unless the supplier can take immediate action which the supplier knows will result in the supplier obtaining, without delay, the required documentary evidence, the supplier's BAS must reflect that the supply is taxable.

78. Documentary evidence is sufficient when it provides a reasonable basis for an independent party to conclude that the goods were exported. This is discussed further at paragraphs 279 to 290 in the Explanation section of the Ruling.

79. If any of the other requirements of subsection 38-185(3) are not met, for example, the goods are not entered for export within the meaning of section 113 of the Customs Act, the supply is not GST-free and the supplier is liable to pay GST in respect of the supply.

80. As part of demonstrating that the supply of goods is a GST free export, a supplier also needs sufficient documentary evidence to show that all the requirements of paragraphs 38-185(3)(a) to (d) are met. The supplier should obtain such documentary evidence either before the goods are exported or within a reasonable period of time after the goods have been exported.

Under item 1, the export must occur within a 60 day period (or such further period as the Commissioner allows). Therefore, if you as the supplier, obtain sufficient documentary evidence of export within the 60 day period (or such further period as the Commissioner allows for export) or you obtain the evidence after the end of the 60 day period and before the due date for lodgment of your next BAS, the requirement to have documentary evidence that the wine you sold were exported is satisfied. In this instance, the supply of wine to the foreign distributor is GST-free as the requirements of item 1 and subsection 38-185(3) of the GST Act are satisfied.

If you are unable to obtain sufficient documentary evidence within this time frame, the requirement that you have sufficient documentary evidence is not met. The supply, therefore, is a taxable supply. Unless you can take immediate action which you know will result in you obtaining, without delay the required documentary evidence, your BAS must reflect that the supply is a taxable supply.