Private ruling: whether a supply by way of charter of a marine vessel made pursuant to an original Standard Bareboat Charter or a new Standard Bareboat Charter entered into in respect of the same vessel at the commencement of each calendar year is connected with Australia.
Published: May 2014

Ruling: Q1: Is the supply by A or B (a Vessel Operating Company (VOC)) of the charter of a marine vessel and/or remote operated vehicle (ROV) (collectively the Goods) pursuant to an original Standard Bareboat Charter that was in place when the Goods were first imported into Australia a taxable supply within the meaning of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, the supply by a VOC of the Goods pursuant to an original Standard Bareboat Charter that was in place when the Goods were first imported into Australia is not a taxable supply within the meaning of the GST Act. | Q2: Does each VOC make a new supply of the Goods each time that the VOC enters into a new Standard Bareboat Charter at the beginning of each calendar year, or is there merely a continuation of the original Standard Bareboat Charter? | A2: Yes, each VOC does make a new supply of the Goods each time the VOC enters into a new Standard Bareboat Charter at the beginning of each calendar year as the new Standard Bareboat Charter is not merely a continuation of the original Standard Bareboat Charter. | Q3: If each VOC makes a new supply upon entry into a new Standard Bareboat Charter each calendar year, is that new supply a taxable supply? | A3: Yes, the supply by a VOC of the Goods pursuant to a new Standard Bareboat Charter is a taxable supply.

Relevant facts and circumstances: Applicants: A and B are non-resident entities for Australian tax purposes and are ultimately owned by C which is also a non-resident. Ownership and leasing of vessel and remote operated vehicle: C is a global supplier of offshore services which uses special purpose vessels and ROVs to perform activities. Each vessel or ROV is owned by an individual VOC within the C Group and each VOC charters the vessel or ROV to another entity within the C Group (which is referred to as the Vessel Charter Company (VCC) pursuant to a Standard Bareboat Charter. The VCC uses the vessel or ROV to carry out the activities. For example, A is a VOC which owns the vessel 'X' and charters X to a VCC called P. Original Standard Bareboat Charter: The original Standard Bareboat Charter between a VOC and a VCC is in place from the date the VOC acquires the vessel or ROV. The VOC and the VCC sign a new Standard Bareboat Charter at the beginning of each calendar year. The Goods remain in the possession of the VCC at all times. The VOC charges the VCC a Charter Hire calculated per 24 hours and paid monthly. The aggregate Charter Hire charged by each VOC to each VCC in each year exceeds AUD75,000. The VOC does not employ personnel in Australia and is not involved in the installation, assembly or operation of the Goods in Australia. Each VCC uses the Goods to perform offshore projects in a number of countries, including Australia. Each original Standard Bareboat Charter between the VOC and the relevant VCC was entered into outside Australia and at that time the relevant Goods were located outside Australia as the VCC took possession of the Goods offshore. The VCC had possession of the Goods when the Goods were imported into Australia, was nominated as 'owner' of the Goods for Customs purposes, and paid GST on the importation of the Goods. New Standard Bareboat Charter: A new Standard Bareboat Charter in respect of the Goods is executed by the VOC and the VCC at the beginning of each calendar year on terms which are substantially the same terms as the original Standard Bareboat Charter. Each new Standard Bareboat Charter states that delivery of the Goods at commencement of the charter period and re-delivery of the Goods at the termination of the charter period is to occur either at [offshore] or such other place as is agreed by the parties, but in practice the relevant VCC has possession of the Goods at all relevant times. In a number of cases the Goods have been in Australian waters at the time when the VOC and the VCC have executed a new Standard Bareboat Charter. GST registration and reporting: B is registered for GST. A is not registered for GST. The relevant VCCs are registered for GST and have reported and paid GST on their taxable supplies during the relevant tax periods. Original Standard Bareboat Charter between A and P: The original Standard Bareboat Charter adopts the terms of the 'Barecon 89' Standard Bareboat Charter, is made offshore and dated January 20XX. The original Standard Bareboat Charter is in two parts. Part I comprises items such as the place of business of the VOC and the VCC, the vessel's name etc. plus a Rider which contains further terms such as port or place of delivery and re-delivery, charter period and charter hire. Part II incorporates the 'Barecon 89' standard terms and conditions, e.g. delivery, time for delivery, inspection, maintenance and operation. The preamble to the Standard Bareboat Charter states: It is mutually agreed that this contract shall be performed subject to the conditions contained in this Charter which shall include Part I, the Rider to Part I and Part II. Part I states that the Owner (i.e. VOC) is A, the Charterer (i.e. VCC) is P of [offshore], and the vessel's name is 'Y'. The Rider attached to the original Standard Bareboat Charter states that the port or place of delivery is [offshore] or as otherwise agreed between the Owners and the Charterers, the time for delivery is between 1 and 15 January 20XX, the charter period is between 1 January and 31 December 20XX with a minimum charter of 90 days plus an option for the Owners to terminate the charter after 90 days by giving 14 days prior written notice. The place of re-delivery is [offshore] or as otherwise agreed between the Owners and the Charterers. The Rider also states the amount of the charter hire per 24 hours, the currency and method and the place of payment (telegraphic transfer to the Owner's nominated account). New Standard Bareboat Charter between A and P: The new Standard Bareboat Charter in respect of the same vessel (i.e. 'Y') is between A (as Owner) and what appears to be a different VCC, i.e. PB of [offshore]. However we were advised that the VCC is the same VCC as under the original Standard Bareboat Charter which had changed its domicile from [offshore] to [offshore]. The new Standard Bareboat Charter was made at [offshore] on 1 January 20XX. The Rider states that the port or place of delivery is [offshore] or as otherwise agreed between the Owners and the Charterers, the time for delivery is between 1 and 15 January 20XX, the charter period is between 1 January and 31 December 20XX with a minimum charter of 90 days and an option for the Owner to terminate the charter after 90 days by giving 14 days prior written notice. The place of re-delivery is [offshore] or as otherwise agreed between the Owners and the Charterers. The Rider also states the amount of the charter hire per 24 hours, the currency and method of payment, and the place of payment. Submissions: It was submitted that that supply made under an original Standard Bareboat Charter was not a taxable supply because it was not connected with Australia. The ruling request referred to section 38-187 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and paragraph 44 of Goods and Services Tax Ruling GSTR 2000/31 in support of the proposition that the supply made pursuant to an original or a new Standard Bareboat Charter is a supply of goods to which subsections 9-25(1) to 9-25(3) of the GST Act apply for the purpose of determining whether that supply is connected with Australia. It was submitted that subsections 9-25(1) and (2) of the GST Act did not apply to a supply made pursuant to the original Standard Bareboat Charter because the Goods were located outside Australia when the original Standard Bareboat Charter was entered into. Nor did subsection 9-25(3) apply because the VCC took possession of the Goods outside Australia and the supplier (i.e. the VOC) did not import the Goods into Australia or install or assemble the Goods in Australia. In relation to whether the supply made pursuant to the new Standard Bareboat Charter was connected with Australia, it was submitted that the new Standard Bareboat Charter was on substantially the same terms as the original Standard Bareboat Charter and effectively only acknowledged a continuation of the original Standard Bareboat Charter and did not constitute a new supply for GST purposes. The submissions acknowledged that the terms of the original Standard Bareboat Charter provided for the Goods to be re-delivered to a specified port at the end of each charter period, but referred to the intention within the C Group that the Goods are leased by a VOC to a VCC at all relevant times and the fact that the Goods remained in the possession of the VCC at all relevant times. It was submitted that the form and substance of the arrangement is a perpetual Standard Bareboat Charter from the time the original Standard Bareboat Charter was entered into. It was submitted that the new Standard Bareboat Charter merely acknowledged that the perpetual arrangement remained on foot and did not constitute a new supply. The submissions relied on paragraph 34 of Goods and Services Tax Ruling GSTR 2000/37 in support of the proposition that it is appropriate to look to the true substance of the arrangement and not necessarily the label placed on documents by the parties. In the alternative it was submitted that, if the ATO considered that a new Standard Bareboat Charter did constitute a further supply of the Goods, the further supply was not connected with Australia pursuant to section 9-25 of the GST Act because the VCC took possession of the Goods outside Australia when the original Standard Bareboat Charter was entered into and the VCC maintained that possession when the new Standard Bareboat Charter was entered into so the Goods were neither delivered or made available to the recipient of the supply in Australia, removed from Australia, nor imported, installed or assembled in Australia by the VOC when the new Standard Bareboat Charter was entered into. The submissions referred to paragraphs 45 to 47 of Goods and Services Tax Ruling GSTR 2000/31 which refer to goods being delivered or made available in Australia if they are physically delivered or made available here and it was submitted that the Goods were not physically delivered or physically made available when a new Standard Bareboat Charter was entered into because the Goods were imported into Australia by the recipient of the supply when the original Standard Bareboat Charter was entered into and remained in the possession of the recipient at all material times. The submissions also referred to paragraph 49 of GSTR 2000/31 which states that where the recipient imports the goods into Australia the supply is not connected with Australia under subsection 9-25(1) because the goods are not delivered or made available to the recipient in Australia. It was submitted that, in the present case the recipient (i.e. the VCC) imported the Goods into Australia and retained possession of the Goods at all material times and that it would be inconsistent with paragraph 49 of GSTR 2000/31 to conclude that signing a new Standard Bareboat Charter at the beginning of each calendar year results in a supply of Goods that were previously imported into Australia by the recipient to now be connected with Australia on the basis that the Goods and delivered or made available in Australia. Further information provided: A and B's adviser confirmed that there was no change of VCC between the original and new Standard Bareboat Charter but that the charterer changed its corporate residence from [offshore] to [offshore] during the period of the charter and attached a correspondence trail that included an email to the ATO notifying the change of residence. A and B's adviser also stated that they had confirmed with their clients that the only entity that A will ever charter the vessel to is P and that the substance of the arrangement is akin to a perpetual lease.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999, section 9-25.

Reasons for decision: Summary: The supply made by a VOC pursuant to a Standard Bareboat Charter is a supply of goods. At the time when a VOC entered into the original Standard Bareboat Charter the Goods were located outside Australia and the relevant VCC took possession of the Goods outside Australia. On that basis the supply of the Goods pursuant to the original Standard Bareboat Charter is connected with Australia pursuant to subsection 9-25(3) of the GST Act only if the VOC either imported the Goods into Australia or installed or assembled the Goods in Australia. As the relevant VCC took possession of the Goods outside Australia and the VOC was not responsible for or involved in the importation of the Goods into Australia or installation or assembly of the Goods in Australia, the supply of the Goods pursuant to the original Standard Bareboat Charter was not connected with Australia. | Detailed Reasoning - Detailed reasoning: Section 9-5 of the 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 Australia; 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. It was acknowledged in the ruling request that the supply made by a VOC pursuant to a Standard Bareboat Charter was made for consideration, made in the course or furtherance of an enterprise carried on by the VOC. It was further acknowledged that B (a VOC) is currently registered for GST and that that the other VOCs would be required to be registered for GST if the supplies that they made pursuant to Standard Bareboat Charters were connected with Australia. At issue was whether the supply made by a VOC pursuant to a Standard Bareboat Charter is connected with Australia. Section 9-25 of the GST Act sets out rules for whether a supply is connected with Australia which differ according to whether there is a supply of goods, real property, or any other thing. It was submitted in the ruling request that the supply made by a VOC pursuant to a Standard Bareboat Charter is a supply of goods. Section 195-1 of the GST Act states: 'goods' means any form of tangible personal property The ruling request referred to paragraph 44 of Goods and Services Tax Ruling GSTR 2000/31 which explains the requirement that goods are tangible property: 44. A supply of goods is a supply of any form of tangible personal property, that is, any form of personal property that has a physical existence but does not include intangible personal property such as intellectual property like a copyright. A supply of goods can occur by way of sale, lease, hire etc. The requirement that goods are personal property distinguishes goods from 'real property' as defined in section 195-1 of the GST Act, i.e. 'real property' includes: (a) any interest in or right over land; or (b) a personal right to call for or be granted any interest in or right over land; or (c) a licence to occupy land or any other contractual right exercisable over or in relation to land. In our view the supply of a vessel or ROV by a VOC pursuant to a Standard Bareboat Charter is a supply of goods as the Goods are tangible property and are personal property rather than real property. This view is supported by Examples 14 and 15 in Goods and Services Tax Ruling GSTR 2003/15 (Paras 305 to 310) which apply the tests in subsections 9-25(1) and (3) for whether a supply of goods is connected with Australia to the supply of equipment (i.e. crop dusters). It was stated in the ruling request that at the time when a VOC entered into the original Standard Bareboat Charter in respect of any Goods the Goods were located outside Australia and the relevant VCC took possession of the Goods outside Australia. On that basis it was submitted that the supply of the Goods by way of the original Standard Bareboat Charter can only be connected with Australia pursuant to subsection 9-25(3) of the GST Act if the supplier (i.e. the VOC) either imported the Goods into Australia or installed or assembled the Goods in Australia. As the relevant VCC took possession of the Goods outside Australia and the VOC was not responsible for or involved in the importation of the Goods into Australia or installation or assembly of the Goods in Australia, it was submitted that the supply of the Goods was not connected with Australia. We agree with this submission which is supported by Example 14 in GSTR 2003/15 (if the VOC is treated as 'Aus Farmequip' and the VCC is treated as 'Aus Cotton'), paragraph 308 of which states that the supply by Aus Farmequip by way of lease of equipment to Aus Cotton is not a taxable supply because the requirements of subsections 9-25(1) and (3) are not satisfied: Example 14 - Lease of goods which are located overseas at time of agreement - lessee imports 305. Aus Farmequip purchases US-made crop dusters from US Co. The crop dusters remain in the US until Aus Farmequip enters into lease agreements with its customers. Aus Cotton leases a crop duster from Aus Farmequip which it intends to use to spray cotton crops in Moree, Australia. Delivery of the crop duster to Aus Cotton takes place in the US. Aus Cotton transports the crop duster from the US to Moree. Aus Cotton pays all the transportation costs, and takes care of the customs formalities, including paying any customs duty and GST on the taxable importation. 306. Aus Farmequip retains ownership of the crop duster, but has no further role in the importation of the duster. Aus Cotton causes the goods to be brought to Australia for spraying its crops and contracting to spray other farmers' crops. Aus Cotton is the entity that imports the crop duster and is entitled to the input tax credit on the creditable importation (provided the requirements for a creditable importation are satisfied). 307. US Co does not make a taxable supply to Aus Farmequip as not all the requirements for a taxable supply are met. The supply is not connected with Australia under subsections 9-25(1) or 9-25(3). The supply of the crop duster by way of sale to Aus Farmequip is not made wholly within Australia (subsection 9-25(1)), and the supplier (US Co) does not import it (subsection 9-25(3)). 308. Aus Farmequip does not make a taxable supply to Aus Cotton as not all the requirements for a taxable supply are met. The supply by way of lease to Aus Cotton is not connected with Australia under subsections 9-25(1) or 9-25(3). The crop duster is not delivered, or made available, in Australia (subsection 9-25(1)), and the supplier (Aus Farmequip) does not import it (subsection 9-25(3)). Based on the advice in the ruling request that at the time each original Standard Bareboat Charter was entered into the relevant Goods were outside Australia and that the relevant VCC took possession of the Goods at [offshore], that the VCC was nominated as 'owner' of the Goods for the purpose of importing the Goods into Australia, and that the VOC was not involved in the installation or assembly of the Goods in Australia, we consider that the supply made by the VOC under the original Standard Bareboat Charter falls within Example 14, was not connected with Australia, and was not a taxable supply. | Summary: Whilst the VOC and the VCC may have intended a transaction which comprises a single ongoing supply commencing with the original Standard Bareboat Charter, the transaction entered into is an original Standard Bareboat Charter followed by a new Standard Bareboat Charter, each of which has a finite Charter Period comprising a calendar year and requires the VCC to redeliver the vessel to the VOC at the expiration of that Charter Period and does not provide for extension or renewal of the Charter Period. We therefore consider that a VOC makes a new supply when a new Standard Bareboat Charter is entered into. | Detailed Reasoning - Detailed reasoning: It was submitted in the ruling request that a new Standard bareboat Charter entered into by each VOC and the relevant VCC at the commencement of each calendar year 'effectively only acknowledge a continuation of the existing lease given that under the C Group structure it is intended that relevant vessels will at all times be leased to VCCs'. Goods and Services Tax Ruling GSTR 2006/9 sets out a number of propositions considered relevant in analysing a transaction in relation to a supply, including: | Detailed Reasoning - Proposition 10: it is necessary to analyse the transaction that occurs, not a transaction that might have occurred: 112. There may be a number of different ways by which an entity could achieve a desired end result. In addition, parties to an arrangement may contemplate an entity making a supply of a particular kind but, as events transpire, a different supply may actually be made by the entity. In determining whether the entity has made a supply, and the true character of any supply it has made, what is relevant is what the entity actually did, rather than what it might have done. and: | Detailed Reasoning - Proposition 11: the agreement is the logical starting point when working out the entity making the supply and the recipient of that supply: 119. Examining the agreement or other reciprocal legal relationships is the starting point in analysing an arrangement to determine who is making a supply to whom. In the present case the each VOC and VCC chose to enter into a Standard Bareboat Charter with a Charter Period between 1 January and 31 December of a particular year, subject to the VOC having an option to terminate the charter after a 90 day minimum charter period. The Standard Bareboat Charter states: Delivery … The delivery to the Charterers of the Vessel and the taking over of the Vessel by the Charterers shall constitute a full performance by the Owners of all the Owner's obligations under clause 2… The Vessel shall during the Charter period be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect … Hire The Charterers shall pay to the Owners for the hire of the Vessel at the lump sum per calendar month as indicated in Box 21 commencing on and from the date and hour of her delivery to the Charterers and at and after the agreed lump sum for any part of a month. Hire to continue until the date and hour when the Vessel is redelivered by the Charterers to her Owners . … Redelivery The Charterers shall at the expiration of the Charter Period redeliver the Vessel at a safe and ice-free port or place as indicated in Box 16. … Should the Vessel be ordered on a voyage by which the Charter may be exceeded the Charterers to have the use of the Vessel to enable them to complete the voyage, provided it could be reasonably calculated that the voyage would allow redelivery about the time fixed for the termination of the Charter. Whilst the VOC and the VCC may have intended a transaction which comprises a single ongoing supply commencing with the original Standard Bareboat Charter, the transaction that occurred is a series of Standard Bareboat Charters each of which has a finite Charter Period comprising a calendar year and requires the VCC to redeliver the vessel to the VOC at the expiration of that Charter Period. There is no provision for extension or renewal of the Charter Period and the possibility of any such extension or renewal appears to be contradicted by the portion of clause 14 set out above which states that if a Vessel is on a voyage that might cause the Charter Period to be exceeded, the Charter Period nevertheless terminates but the Charterer is allowed to have use of the Vessel to complete that voyage. We therefore consider that terms of the Standard Bareboat Charter do not support the submission made in the ruling request. Our view that the VOC makes a new supply when a new Standard Bareboat Charter is entered into is supported by the views expressed in Goods and Services Tax Advice GSTA TPP 009 and Goods and Services Tax Ruling GSTR 2003/11. GSTA TPP 009 discusses whether an agreement to make a supply, followed by the actual supply itself may constitute two separate taxable supplies and uses the example of parties entering into an agreement to lease (because the premises are not in a state ready to be leased) followed by a formal lease (when the premises become available). GSTA TPP 009 states: The definition of supply in section 9-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) means that there are two supplies, one upon entering into the contract (the agreement to lease) and again when the underlying asset is delivered (the underlying lease). | Detailed Reasoning - Explanation: If there are two distinct supplies; being the entry into the agreement to make a subsequent supply and the subsequent supply itself, the GST consequences of each transaction depend on whether there is separate consideration for each supply. If there is no separate consideration for the agreement, that transaction is not a taxable supply under section 9-5 of the GST Act. However, if the recipient provides distinct consideration for an option or right to receive a subsequent supply of something at a later date, the granting of the option or right may be a taxable supply distinct from the subsequent supply. The reference in GSTA TPP 009 to 'the definition of supply in section 9-10' of the GST Act suggests that the agreement to lease falls within paragraph 9-10(2)(g) - an entry into an obligation - and the lease falls within paragraph 9-10(2)(d) - a grant of real property. We consider that the approach adopted in GSTA TPP 009 of considering whether the arrangement made pursuant to each agreement satisfies a paragraph within subsection 9-10(2) of the GST Act and whether there is separate consideration for each can be applied in the present case. In our view the arrangement under the original Standard Bareboat Charter falls within paragraph 9-10(2)(e) (the grant of any right) and the arrangement under the new Standard Bareboat Charter between the same parties in respect of the same vessel also falls within paragraph 9-10(2)(e) and there is a distinct consideration for each supply (the charter hire payable under the original Standard Bareboat Charter and the charter hire payable under the new Standard Bareboat Charter). Consequently there are two supplies, not the single perpetual supply suggested in the ruling request. Goods and Services Tax Ruling GSTR 2003/11 deals with the GST treatment of payments received on early termination of a lease of goods and states that where there is an early termination by a separate agreement between the parties (because it is not provided for in the original lease), the termination payment is treated as consideration for a separate supply made by the lessor (Paras 38-39). In the present case the new Standard Bareboat Charter is made pursuant to an agreement which is separate from the original Standard Bareboat Charter and for a separate consideration. | Summary: The supply made by a VOC pursuant to a new Standard Bareboat Charter is connected with Australia pursuant to subsection 9-25(1) of the GST Act as the Goods are made available, in Australia, to the recipient of the supply. | Detailed Reasoning - Detailed reasoning: It was submitted that, if the ATO considers that a VOC makes a supply each time the VOC enters into a new Standard Bareboat Charter, that supply is not connected with Australia (and therefore not a taxable supply) because it does not involve either the Goods being delivered or made available in Australia to the VCC (subsection 9-25(1)) or the Goods being brought to Australia and the supplier (i.e. the VOC) either importing the goods into Australia or installing or assembling the Goods in Australia (subsection 9-25(3)). Paragraphs 116 to 132 in the Explanation section of GSTR 2000/31 discuss whether goods are 'delivered or made available in Australia to the recipient of the supply' for the purposes of subsection 9-25(1) of the GST Act. That discussion begins with the meaning of 'delivered or made available': 118. In the context of subsection 9-25(1) the phrase 'delivered, or made available' takes the meaning that the goods are either physically delivered, or if not physically delivered, physically made available in Australia. 119. Made available refers to the situation where goods are not actually delivered to the recipient but rather the supplier makes the goods physically available to the recipient in Australia. For example, a supplier may make goods available for collection by the recipient. This is the case where a supplier of sand sells a load of sand to a customer and the customer takes away the sand which the supplier makes available. 120. Thus, goods are 'delivered' in Australia if the goods are actually physically delivered in Australia. Goods are made available in Australia if the goods are physically available for the recipient in Australia. Both 'delivered' and 'made available' look at the place where the physical goods are at the relevant time. Although the Standard Bareboat Charter states that the Vessel shall be delivered and taken over by the Charterers at the port or place indicated in Box 13 and that the delivery to the Charterers of the Vessel and the taking over of the Vessel by the Charterers shall constitute full performance by the Owners of all the Owners obligations, we do not consider that the Goods are 'delivered' to the VCC at the commencement of a new Standard Bareboat Charter is entered into. However, paragraph 120 of GSTR 2000/31 states that goods are 'made available' if the goods are 'physically available for the recipient in Australia'. Although it was submitted that as the VCC has physical possession of the Goods at all relevant times after the original Standard Bareboat Charter is entered into, the Goods are not 'made available' to the VCC when a new Standard Bareboat Charter is entered into, that submission is not supported by the terms of the Standard Bareboat Charter. Those terms indicate that both the original and any new Standard Bareboat Charter is for a fixed Charter Period (with the VOC able to terminate after a minimum charter of 90 days and that the VCC has possession of the Goods only for the duration of that Charter Period - as noted above, each Standard Bareboat Charter states: The Vessel shall during the Charter Period be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect. The Standard Bareboat Charter obliges the VCC to re-deliver the Vessel at the end of the Charter Period and requires the VOC and VCC to each appoint a surveyor to determine the condition of the vessel both at the time of re-delivery and at the time of delivery pursuant to the next Standard Bareboat Charter, with the VOC to bear the cost of the On-Survey, including loss of time, if any and the VOC obliged 'before and at the time of delivery exercise due diligence to make the Vessel seaworthy and in every respect ready in hull, machinery and equipment for service under this Charter'. The ruling request referred to paragraph 49 of GSTR 200031: 49. Where the recipient imports the goods into Australia, the supply of goods is not connected with Australia under subsection 9-25(1) because the goods are not delivered, or made available, in Australia to the recipient of the supply. and it was submitted that in the present case the recipient (i.e. the VCC) imported the Goods into Australia and has maintained possession of the Goods at all material times, and: In our submission it would be inconsistent with the Commissioner's conclusion at paragraph 49 to conclude that signing of a new document at the commencement of each calendar year could result in the Goods that were imported into Australia by the recipient to now be connected with Australia on the basis that the Goods are now delivered or made available in Australia. The view stated in paragraph 24 of GSTR 2000/31 is repeated and illustrated by way of Example 8 in paragraphs 129 and 130 of GSTR 2000/31: 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. Example 8 - Goods supplied by resident supplier and imported by resident recipient 130. Joe decides to fit his car with specialised seat covers. He approaches Seat Co in Sydney to supply the seat covers. However, the seat covers have to be imported from Italy. Under the arrangements with Seat Co, Joe imports the seat covers into Australia and pays Seat Co for the goods once the seat covers are cleared through Customs. The supply of goods, specialised seat covers by Seatco to Joe, is not connected with Australia because the goods are not delivered, or made available to Joe, in Australia. However, Joe makes a taxable importation upon which GST is payable. In our view Example 8 indicates that the references to 'where the recipient imports the goods into Australia' in paragraph 49 and to 'a supply of goods that involves the recipient importing the goods into Australia' in paragraph 129 of GSTR 2000/31 are intended to cover cases where the recipient of the relevant supply imports the goods into Australia. An example of such a supply is the supply of the Goods by the VOC to the VCC pursuant to the original Standard Bareboat Charter. That view is confirmed again in Example 6 in GSTR 2003/15 at paragraph 182 and footnote 68A (which refers to paragraphs 49 and 129 of GSTR 2000/31). For the reasons set out above in relation to Question 2 we consider that when the VOC enters into a new Standard Bareboat Charter in respect of those Goods there is a new supply. As that new supply does not involve the recipient importing the Goods into Australia, paragraph 49 of GSTR 2000/31 does not apply to that supply. We do not accept the submission that entering into a new Standard Bareboat Charter in respect of those Goods involves merely 'signing of a new document at the commencement of each calendar year'. In our view GSTR 2000/31 draws a distinction between Example 8 in GSTR 2000/31 (discussed above) and Example 7 in GSTR 2000/31 and a supply of Goods made by a VOC pursuant to a new Standard Bareboat Charter falls within Example 7 but not within Example 8. Example 7 involves a car dealer which imports a car into Australia and then supplies the car to a customer in Australia: Example 7 - Supplies of imported goods wholly within Australia 124. Joe goes to a car dealer in Perth and, after driving a demonstration model, agrees to purchase an Italian manufactured car of a particular model. The car dealer does not have that model car in stock. The car dealer orders and purchases the car from the Italian manufacturer and imports the car into Australia. When the car dealer receives the imported car, Joe is contacted and told that the car is ready for delivery. 125. Even though the car is imported by the car dealer, the supply from the car dealer to Joe is wholly within Australia. This supply is connected with Australia as the car is delivered to Joe in Australia. 126. This example illustrates that although the goods are supplied wholly within Australia, the goods themselves may be imported goods. In Example 7 the relevant supply is the supply of the car to Joe by the car dealer after the car dealer has imported the car into Australia. Paragraph 125 of GSTR 2000/31 states that that supply is connected with Australia pursuant to subsection 9-25(1) of the GST Act as the car is delivered in Australia to the recipient of the supply. Example 7 supports the view that, notwithstanding that the VCC imported the Goods into Australia for the purposes of the supply made pursuant to the original Standard Bareboat Charter, when the VOC subsequently supplies those Goods to the VCC pursuant to a new Standard Bareboat Charter the Goods are 'made available, in Australia to the recipient of the supply' and the supply made pursuant to the new Standard Bareboat charter is therefore connected with Australia.