Private ruling: Goods and services tax (GST) and roofing work
Published: March 2012
Ruling period: The scheme commences on:

Ruling: Q1: Is GST payable where you supplied the roof and fitted it to the property? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You were contracted to supply a roof and fit it to a residential house located in Australia. A property manager requested you to do this. The property manager requested you to send the invoice to an address in an overseas country. A certain individual has received your invoice. A certain individual is a non-resident. A certain individual has a company. You are in a dispute with a certain individual over whether GST is payable. You do not know who your customer is or whether your customer is an individual or instead a company. The property is leased out.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1) | A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 section 38-190 | A New Tax System (Goods and Services Tax) Act 1999 subsection 40-35(1)

Reasons for decision: Summary: GST is payable as the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are satisfied. | Detailed Reasoning - Detailed reasoning: GST is payable by you where you make a taxable supply. You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states: You make a taxable supply if: you make the supply for *consideration; and the supply is made in the course or furtherance of an *enterprise that you *carry on; and the supply is *connected with Australia; and 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) There is no blanket GST exemption for supplies made to non-residents or entities located overseas. | Detailed Reasoning - Determining the nature of your supply: Goods and Services Tax Ruling GSTR 2000/18 deals with construction and building services. Paragraph 19 of GSTR 2000/18 states: 19. Where you are engaged to produce a given result, we consider the substance of the agreement is to perform a service. Any materials used in producing the service are ancillary or integral to the work that must be performed to provide the finished job. In such circumstances, you are making a single supply, being a supply of a service. According to paragraph 10 of GSTR 2000/18, in most circumstances a supply of construction and building services is entered into to provide a given result. In your case, you have been engaged to produce a given result, that is, to affix a roof. The associated materials that you have used are ancillary or integral to the work that you had to perform to provide the finished job. Therefore, you have made a single supply, being a supply of a service. You have satisfied the requirements of paragraph 9-5(a) to 9-5(d) of the GST Act. That is, you supplied the roofing services for consideration and in the course or furtherance of an enterprise you carry on. Additionally, this supply was connected with Australia, as you have performed these services in Australia and you are registered for GST. There are no provisions in the GST Act under which your supply of these services was input taxed. Therefore, what remains to be determined is whether your supply of these services was GST-free. A supply of services to a non-resident who is not in Australia may be GST-free under item 2 in the table in subsection 38-190(1) of the GST Act (item 2). Item 2 provides that a supply of something other than goods or real property is made to a non-resident who is not in Australia when the thing supplied is done is GST-free where: (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. However, subsection 38-190(2A) of the GST Act states: A supply covered by any of items 2 to 4 in the table in subsection (1) is not *GST-free if the acquisition of the supply relates (whether directly or · indirectly, or wholly or partly) to the making of a supply of *real property · situated in Australia that would be, wholly or party, *input taxed under Subdivision 40-B or 40-C. In accordance with subsection 40-35(1) of the GST Act, leasing out residential premises is an input taxed supply. Subsection 40-35(1) of the GST Act is part of subdivision 40-B of the GST Act. The requirements of item 2 would not have been satisfied if your customer was a certain entity as it is not a non-resident. A certain individual may have been your customer. As a certain individual is a non-resident individual and that individual is overseas, it is possible that the requirements of item 2 would have been satisfied if that individual was your customer. We cannot determine based on the information provided whether your customer was a non-resident that was outside Australia when you performed the services for the purposes of item 2, as it is not clear who your customer was. If the requirements of item 2 were not satisfied, your supply of the roofing services would not be GST-free under item 2. If the requirements of item 2 were satisfied, the exclusion in subsection 38-190(2A) of the GST Act from GST-free treatment would apply because your customer's acquisition of your supply of services would relate to the making of a supply of real property situated in Australia that would be input taxed under Subdivision 40-B or 40-C of the GST Act (the input taxed supply being leasing out residential premises). In any case, your supply of the roofing services is not GST-free under any provision of the GST Act. Therefore, as you have satisfied all of the requirements of section 9-5 of the GST Act, you have made a taxable supply. Hence, GST is payable in this case.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.