Private ruling: GST and supply of goods imported into Australia
Published: August 2013

Ruling: Q1: Do you need to charge goods and services tax (GST) on invoices for goods sold to an Australian resident customer where the Australian resident customer takes delivery of the goods outside of Australia and import them into Australia? Advice No, you do not need to charge GST on invoices for goods sold to an Australian resident customer where the Australian resident customer takes delivery of the goods outside of Australia and import them into Australia because your supply of the goods to the Australian customer is not connected with Australian under subsection 9-25(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and therefore not subject to GST.


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 9-25; and | A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.

Reasons for decision: Summary: GST is payable on taxable supplies. Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) an entity makes a taxable supply if: (a) the entity makes the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that the entity carries on; and (c) the supply is connected with Australia; and (d) the entity is registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. For your supply of the goods to the Australian customers to be a taxable supply all the requirements in section 9-5 of the GST Act must be satisfied. | Detailed Reasoning - Applying facts to section 9-5 of the GST Act: From the information received you satisfy paragraphs 9-5(a), 9-5(b) and 9-5(d) of the GST Act as you make the supply for consideration, the supply is made in the course of a business that you carry on, and you are registered for GST. What remains to be determined is whether your supply is connected with Australia under paragraph 9-5(c) of the GST Act. Paragraph 9-5(c) of the GST Act Section 9-25 of the GST Act outlines when a supply is connected with Australia. Subsection 9-25(3) of the GST Act discusses when a supply of goods to Australia is connected with Australia and states: Supplies of goods to Australia (3) A supply of goods that involves the goods being brought to Australia is connected with Australia if the supplier either: (a) Imports the goods into Australia; or (b) Installs or assembles the goods in Australia. Goods and Services Tax Ruling GSTR 2000/31 provides guidance on when a supply is connected with Australia for GST purposes. Paragraph 129 of GSTR 2000/31 states: 129. A supply of goods that involves the recipient importing the goods into Australia is not connected with Australia under subsection 9-25(1) as the goods are not delivered, or made available, in Australia to the recipient of the supply. Also, the supply of goods is not connected with Australia under paragraph 9-25(3)(a) because the supplier does not import the goods. However, the recipient importer will make a taxable importation. In circumstances where there are several parties that cause the goods to be brought to Australia (for example seller and buyer) it is usual for the parties to agree which party takes responsibility for the completion of the customs entry formalities and entry of the goods for home consumption. It is this entity that imports the goods (for more information on importation of goods into Australia refer to Goods and Services Tax Ruling GSTR 2003/15 which is available at www.ato.gov.au). From the facts given, the Australian customers are the importers of the goods as they take responsibility for the completion of the customs entry formalities when the goods arrive in Australia. In this case paragraph 9-25(3)(a) of the GST Act is not satisfied as you are not importing the goods into Australia. Further paragraph 9-25(3)(b) of the GST Act is not satisfied as you advise that you do not install or assemble the goods in Australia. Accordingly, paragraph 9-5(c) of the GST Act is not satisfied as the supply of the goods to the Australian customers is not connected with Australia since the requirements in subsection 9-25(3) of the GST Act are not satisfied. | Summary: Based on the facts given, the supply of the goods to the Australian customers is not a taxable supply under section 9-5 of the GST Act and therefore no GST is payable on the supply of these goods.

Relevant facts: You are an Australian company and registered for GST. You sold goods that are manufactured overseas and Australian resident customers purchase the goods from you. | Some of your customers are taking delivery of the goods at the overseas manufacturing factory and organising for their importation into Australia including attending to the GST on importation and to all Australian Customs entries.