Private ruling: GST and second-hand goods
Date of advice: 9 June 2023
Published: 31 July 2023
Ruling period: 1 July 2022 to 30 June 2023

Ruling: Q1: Are you eligible to claim input tax credit on the purchase of specified second-hand goods (the Goods)? | A1: No. Division 66 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) allows an entity, in some circumstances, to claim an input tax credit for an acquisition of second-hand goods even though the supply to the entity was not a taxable supply. Subsection 66-5(1) GST Act provides that when an entity acquires second-hand goods for the purpose of sale or exchange (but not for manufacture) in the ordinary course of its business, the fact that the supply of the goods to the entity is not a taxable supply does not stop the acquisition being a creditable acquisition. However, paragraph 66-5(2)(e) of the GST Act states that section 66-5 of the GST Act does not apply to the acquisition if the entity makes a subsequent supply of the goods that is not a taxable supply. In your case, the subsequent sale of the Goods by you was a GST-free export of goods as you exported the Goods within 60 days after receiving consideration for the supply and issuing an invoice for the supply. Accordingly, you are not entitled to any input tax credit for the acquisition of the Goods.

Relevant facts and circumstances: You are a wholesaler of specified goods. You are registered for GST. On a specified date, you purchased the Goods for $X from an entity (the supplier) in Australia for resale. The Goods were previously used by the supplier. The supplier does not have an ABN and has provided you with a 'Statement by a supplier' form and has crossed the boxes next to the following two statements: The payer is not making the payment in the course of carrying on an enterprise in Australia. wholly of a private or domestic nature (from the supplier's perspective). You then exported the Goods overseas, and sold them for $Y. You treated the sale as a GST-free export of goods as you exported the Goods within 60 days after receiving consideration for the supply and issuing an invoice for the supply. You are not in the business of buying and selling second-hand goods and this was a one-off transaction.

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 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-20 | A New Tax System (Goods and Services Tax) Act 1999 section 66-5