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Edited version of private advice
Authorisation Number: 1051932575653
Date of advice: 10 December 2021
Ruling
Subject: GST and general consultancy services
Question 1
Would the general consultancy services provided to the recipients based overseas be considered as export services and hence GST-free or is GST applicable in this situation?
Answer
Yes. The general consultancy services provided to the recipients based overseas are GST-free.
Question 2
Would the visa application and preparation services by a migration agent provided to recipients based overseas be considered as export services and hence GST-free or is GST applicable to those service fees?
Answer
Yes. The visa application and preparation services by a migration agent provided to recipients based overseas are GST-free.
This ruling applies for the following period:
End date 1 October 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The taxpayer provides migration services to the public.
Most clients of this taxpayer are based in Australia. However, some of them are non-residents and are based overseas.
The visa application and preparation services are provided to non-residents based overseas and who are seeking permission to come to Australia.
The general advice is provided to clients who are non-residents and living overseas and who are not currently seeking a permission to come to Australia.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-190(1)
Reasons for decision
Relevant to the supply described above is item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) (item 2).
Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if it is a supply that is made to a non-resident, who 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.
Where the requirements of paragraphs (a) or (b) of item 2 are satisfied, the supply will be GST-free. However, item 2 is limited by subsection 38-190(3) of the GST Act.
Limitations of item 2 - subsection 38-190(3) of the GST Act
If the supply covered by item 2 is under an agreement entered into, whether directly or indirectly, with a non-resident entity and that supply is provided or the agreement requires that it to be provided to another entity in Australia, subsection 38-190(3) of the GST Act negates the GST-free status of that supply.
When an Australian entity provides general consultancy services and visa application and preparation services to a non-resident subsection 38-190(3) of the GST Act will not be applicable if that supply is not provided or the agreement does not require that it to be provided to another entity in Australia. Under such circumstances the services provided by the Australian entity to the non-resident entity will be GST-free.