ATO Interpretative Decision

ATO ID 2008/68 (Withdrawn)

Goods and Services Tax

GST and supply of services performed on an island which is part of the Commonwealth of Australia
FOI status: may be released
  • This ATO ID is withdrawn because it contains a view in respect of a provision of the A New Tax System (Goods and Services Tax) Act 1999 that does not apply after 1 October 2016. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for tax periods up to 1 October 2016.
    This document has changed over time. View its history.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the supply of services performed by an entity on an island which is located outside the outer limit of the territorial sea surrounding mainland Australia, but which is part of the Commonwealth of Australia, connected with Australia under subsection 9-25(5) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision

Yes, the supply of services is connected with Australia under subsection 9-25(5) of the GST Act, as the services are performed in Australia.

Facts

The entity supplies services on an island which is located outside the outer limit of the territorial sea surrounding mainland Australia.

The island is part of an Australian State.

Provision is not made under any Act of Parliament for the island to be governed as a Territory.

Reasons for Decision

Subsection 9-25(5) of the GST Act sets out the circumstances in which a supply of a thing other than goods or real property is connected with Australia.

A supply of services will be connected with Australia under this provision if:

the services are performed in Australia; or
the supplier makes the supply through an enterprise that the supplier carries on in Australia.

Paragraph 17(a) of the Acts Interpretation Act 1901 (Acts Interpretation Act) provides that, in any Act, unless the contrary intention appears, the term 'Australia' means the Commonwealth of Australia and, when used in a geographical sense, includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands, but does not include any other external Territory.

A contrary intention appears in the GST Act, but only insofar as the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands and certain installations are concerned. Specifically, section 195-1 of the GST Act provides that, in that Act, the term 'Australia' does not include any external Territory, but does include an installation that is deemed by section 5C of the Customs Act 1901 to be part of Australia.

The island on which the entity performs the services is part of an Australian State and is thus part of the Commonwealth of Australia. It follows that the island will be part of Australia for the purposes of the GST Act unless it is an external Territory.

The term 'external Territory' is not defined in the GST Act. Paragraph 17(pd) of the Acts Interpretation Act provides that in any Act, unless the contrary intention appears, 'external Territory' means a Territory, not being an internal Territory, for the government of which as a Territory provision is made by any Act.

In this case, provision is not made under any Act of Parliament for the island to be governed as a Territory. Accordingly, the island is not an external Territory.

As the island is part of the Commonwealth of Australia and is not an external Territory, it is part of Australia for the purposes of the GST Act. Accordingly, the entity's supply of services is a supply that is performed in Australia. It follows that the entity's supply is connected with Australia under subsection 9-25(5) of the GST Act.

Note - this ATO ID would, for example, apply to services performed by an entity on Macquarie Island.

Date of decision:  20 February 2008

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   subsection 9-25(5)
   section 195-1

Acts Interpretation Act 1901
   Paragraph 17(a)
   Paragraph 17(pd)

Customs Act 1901
   section 5C

Related Public Rulings (including Determinations)
Goods and Services Tax Ruling GSTR 2002/6
Goods and Services Tax Ruling GSTR 2000/31

Related ATO Interpretative Decisions
ATO ID 2002/295

Keywords
Connected with Australia
Goods and services tax

Business Line:  Indirect Tax

Date of publication:  9 May 2008

ISSN: 1445-2782

history
  Date: Version:
  20 February 2008 Original statement
You are here 7 October 2016 Archived