Edited version of private advice

Authorisation Number: 1051620228763

Date of advice: 12 December 2019

Ruling

Subject: GST and supply of visa to a non-resident individual

Question

Is the supply of the visa made by an Australian supplier to you a taxable supply for the purposes of paragraph 11-5(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No, the supply of the visa made by the Australian supplier to you is not a taxable supply for the purposes of paragraph 11-5(b) of the GST Act. The supply of the visa is a GST-free supply under paragraph (a) of item 2 in the table in subsection 38-190(1) of the GST Act. No GST is payable on the GST-free supply.

Relevant facts

You are a new immigrant and came to Australia in 20XX.

You were living and working overseas before migrating to Australia. In 20XX you applied for your visa to come to Australia and paid the visa fee online to the Australian supplier. You were not in Australia at any time when you applied for and received the visa.

The Australian supplier is registered for GST.

The tax invoice you have received from the Australian supplier showed that GST was collected on the fee you paid for the visa.

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

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

GST is payable on a taxable supply. Under section 9-5 of the GST Act a supply is a taxable supply to the extent that the supply is not GST-free or input taxed.

In this instance the supply of the visa made to you by the supplier is a taxable supply to the extent that the supply of the visa is not GST-free or input taxed.

The supply of the visa made to you is not input taxed. We will now consider whether the supply of the visa is GST-free under the GST Act.

GST-free supply

From the information given you were not a resident of Australia when you applied and received the visa from the supplier. Relevant to the supply made by the supplier to you is item 2 in the table in subsection 38-190(1) of the GST Act (item 2)

Item 2 provides that a supply of a thing other than goods or real property(for example services) made to a non-resident is GST-free if it is a supply that is made to a non-resident that is not in Australia when the thing supplied is done, and:

a)     the supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia; or

b)     the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered or required to be registered for GST.

From the information given paragraph (a) in item 2 is satisfied as:

·        the supply of the visa was made to you, a non-resident of Australia who was not in Australia in relation to the supply when the supply was done; and

·        the supply of the visa is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with real property situated in Australia.'

In this instance the supply of the visa is GST-free under paragraph (a) of item 2 to the extent that it is not negated by subsection 38-190(3) of the GST Act.

There is no need to consider paragraph (b) in item 2 since paragraph (a) is satisfied.

Subsection 38-190(3) of the GST Act

Subsection 38-190(3) of the GST Act provides that without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if:

a)     it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and

b)     the supply is provided or the agreement requires it to be provided to another entity in Australia; and

c)     for a supply other than an input taxed supply - none of the following applies:

                           i.          the other entity would be an Australian-based business recipient of the supply, if the supply had been made to it;

                          ii.          the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or

                         iii.          the other entity is an individual who is provided with the supply as an employee or officer of the recipient, and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense.

All of the requirements in this subsection have to be satisfied for the GST-free supply of the visa under item 2 to be negated from being GST-free and be a taxable supply under section 9-5 of the GST Act.

Subsection 38-190(3) of the GST Act does not apply to the supply of the visa made to you as the supplier was not required to provide the visa to another entity in Australia.

Accordingly, the supply of the visa made and provided to you by the supplier is a GST-free supply under paragraph (a) of item 2. GST is not payable on the supply of visa made to you.