Edited version of private advice

Authorisation Number: 1052054946002

Date of advice: 4 November 2022

Ruling

Subject: GST and seabed intervention

Question 1

Is GST payable on your supply of services to X for the "Y Project - Seabed Intervention" to be performed in a certain place?

Answer

Yes.

Question 2

Will a separate tax invoice for the GST amount expressed in Australian currency comply with the tax invoice requirements?

Answer

Yes.

This ruling applies for the following period

5/07/20XX to 30/06/20XX

The scheme commences on:

5 July 20XX

Relevant facts and circumstances

You are a resident.

You are registered for GST.

You entered into a contract with X under which you will perform seabed intervention/dredging and backfill work in an inlet in a certain place to prepare the seabed for the installation of certain infrastructure.

You have provided to the Australian Taxation Office (ATO) two sample invoices that you propose to issue together to X for a progress payment.

One invoice includes the following information:

• The words 'Tax invoice'
• Supplier's (your) name and ABN
• The recipient's (X's) name and ABN
• Description of what is to be supplied
• The value of the supply in a foreign currency
• The date the document was issued

The other invoice shows the amount of GST in Australian dollars

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 29-70

Reasons for decisions

Question 1

GST is payable on taxable supplies.

Section 9-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:

You make a taxable supply if

(a)           you make the supply for *consideration; and

(b)           the supply is made in the course or furtherance of an

*enterprise that you *carry on; and

(c)           the supply is *connected with the indirect tax zone; and

(d)           you are *registered or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is

*GST-free or *input taxed.

(* Denotes a term defined in section 195-1 of the GST Act).

For the purpose of paragraph 9-5(c) of the GST Act, paragraph 9-25(5)(a) provides that a supply of anything other than goods or real property is connected with the indirect tax zone if the thing is done in the indirect tax zone

The indirect tax zone means Australia (within the meaning of the * ITAA 1997), but does not include any of the following:

(a) the external Territories;

(b) an offshore area for the purpose of the Offshore Petroleum and Greenhouse Gas Storage Act 2006

other than an installation (within the meaning of the Customs Act 1901) that is deemed by section 5C of the Customs Act 1901 to be part of Australia and that is located in an offshore area.

Bays of Australia are part of Australia - they are internal waters of Australia. You will perform work in an inlet in a certain port, and the inlet is an internal water of Australia. The port is not an external Territory of Australia; and it is not in an offshore area for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. Therefore, you will perform the work in the indirect tax zone. As such, the supply of your services is connected with Australia under paragraph 9-25(5)(a) of the GST Act.

Your supply of the services is a taxable supply as the requirements of section 9-5 of the GST Act are met, that is:

• you will supply the services for consideration (the price) [paragraph 9-5(a)] and
• you will supply the services in the course or furtherance of an enterprise that you carry on [paragraph 9-5(b)]; and
• the supply will be connected with the indirect tax zone [paragraph 9-5(c)]; and
• you are registered for GST [paragraph 9-5(d)]; and
• there are no provisions of the GST Act under which your supply of the services will be GST-free or input taxed.

Therefore, GST will be payable on your supply of the services.

Question 2

Section 29-70 of the GST Act sets out the information that a document must contain to be a tax invoice. Goods and Services Tax Ruling GSTR 2013/1 explains the information requirements of tax invoices for the purposes of section 29-70.

Where the consideration for a taxable supply is expressed in a foreign currency, Issue 5.12 of the Financial Services Questions and Answers on the ATO website (Issue 5.12) provides guidance on what must be included in the 'tax invoice' for such supply,

Issue 5.12 provides that for a tax invoice to be in the approved form, it must comply with the tax invoice requirements stated in GSTR 2013/1 and:

• include on the form the GST payable in Australian currency, or
• provide 'sufficient information' to the recipient to work out the GST payable on the supply in Australian currency.

Examples of 'sufficient information' include:

• the price expressed in Australian currency
• the value expressed in Australian currency, or
• the GST payable, the price or value expressed in a foreign currency and the conversion rate used by the supplier, or a statement, to work out the GST payable in Australian currency.

This information can be provided on the tax invoice, or on two or more documents that together meet the information requirements of a tax invoice.

One of the sample invoices that you provided to the ATO shows the GST payable in Australian currency. Therefore, when you issue the two sample invoices together they will comply with the tax invoice requirements as set out in GSTR 2013/1 and in Issue 5.12 of the Financial Services Questions and Answers.