| Disclaimer This edited version has been archived due to the length of time since original publication.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 private advice
Authorisation Number: 1051609050058
Date of advice: 25 November 2019
Ruling
Subject: Importation of goods
Question
Are you entitled to claim input tax credits when you import into Australia goods that you do not own, for the purposes of conducting product testing, and are named as 'owner' on the import declaration?
Answer
Yes. You are entitled to claim input tax credits when you import the goods into Australia.
This ruling applies for the following period:
13 June 20XX - onwards
Relevant facts and circumstances
You are registered for GST.
An entity acquires your services to conduct product testing in Australia as required by the manufacturer of the goods.
You are not engaged or contracted for the purpose of bringing (i.e. importing) and transporting the goods in Australia. However, the transportation and management of the goods is an integral and necessary activity that enables you to fulfil your contractual obligation to manage product testing in Australia.
Where the goods supplies are required to be imported into Australia, you are responsible for the importation of these goods, acts as the importer of record and is nominated as 'owner' of the imported goods on the import declaration. At all relevant times, legal ownership of the goods remains with the manufacturer or the entity that acquired your services.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 15-5
Reasons for decision
Under Division 15 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), an entity is entitled to input tax credits for its creditable importations.
Section 15-5 of the GST Act states:
You make a creditable importation if:
(a) you import goods solely or partly for a creditable purpose; and
(b) the importation is a taxable importation; and
(c) you are registered, or required to be registered.
Goods and Services Tax Ruling GSTR 2003/15 discusses creditable importations including the meaning of the phrase 'you import goods' in paragraph 15-5(a) of the GST Act, and who is entitled to claim input tax credits for creditable importations.
According to paragraph 49 of GSTR 2003/15, the entity that imports goods within the meaning of Division 15, in the context of a taxable importation under Division 13, is the entity that:
(a) causes the goods the be brought to Australia for application to its own purposes after importation, whether by way of supply, use, or otherwise; and
(b) completes the customs formalities for the entry of the goods for home consumption.
Do you cause the goods to be brought to Australia to apply them to your own purpose?
The entity that causes goods to be brought to Australia is identified by looking to the purpose for which the goods are brought to Australia. The entity whose purpose is to apply the goods by way of supply, use or other application to its purposes after importation is the entity that causes the goods to be brought to Australia.
An entity causes goods to be brought to Australia to apply them to its own purpose by way of supply, use or other application where, for example, it:
· arranges for goods that it owns to be sent to Australia so that it can use them in Australia;
· places an order with a foreign supplier for goods, for use as trading stock, to be sent to Australia;
· sends or arranges for goods to be sent to Australia to sell, lease or hire them in Australia; or
· sends or arranges for goods to be sent to Australia for the entity to retain as collector's piece or for investment.
The goods are brought to Australia for the purpose of product testing. Your services are acquired in conducting the product testing which involves you using the goods in the test that you organise. You import the goods to be used in the product testing; as such, you cause the goods to be brought to Australia to apply them to your own purpose.
You complete the customs formalities
Where the goods supplies are required to be imported into Australia, you are responsible for the importation of these goods, act as the importer of record and are nominated as 'owner' of the imported goods on the import declaration
As you cause the goods to be brought to Australia to apply them to your own purpose and you complete the customs formalities, you satisfy the 'you import goods' test for the purpose of paragraph 15-5(a) of the GST Act. Therefore, you make a creditable importation and are entitled to an input tax credit when you import the goods.