Private ruling: GST and supply of services to a non-resident
Date of advice: 25 July 2018
Published: October 2018

Ruling: Q1: Is the supply of arranging services you make to the overseas company a GST-free supply under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you arrange for the sale of the products manufactured by the overseas company to Australian and non-resident customers? | A1: Yes, the supply of arranging services you make to the overseas company is a GST-free supply under item 2 in the table in subsection 38-190(1) of the GST Act when you arrange for the sale of the products manufactured by the overseas company to Australian and non-resident customers. Item 2 provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if it is a supply that is made to a non-resident that is not in Australia when the thing supplied is done, and: 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. Only one of the paragraphs in item 2 needs to be satisfied. From the facts given, your supply of arranging services satisfy paragraph (a) of item 2 as: ● your supply of arranging services is made to the overseas company, a non-resident that is not in Australia in relation to the supply when the supply is done; and ● your supply of arranging services 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 Your supply of arranging services is GST-free under paragraph (a) of item 2 to the extent that it is not negated by subsection 38-190(3) of the GST Act. From the facts given, subsection 38-190(3) of the GST Act does not apply to your supply of arranging services as you are not required to provide your supply of arranging servicers to another entity in Australia. Your supply of arranging services is made and provided to the overseas company and therefore GST-free under item 2.

Relevant facts and circumstances: You are an Australian company and registered for the goods and services tax (GST). You have an agreement with an overseas company. The overseas company manufactured products and you agree to arrange for the sale of products supplied by the overseas company to customers who are in and outside of Australia. You provide quotations for products to prospective clients and existing clients. A large proportion of sales are repeat business from existing customers and most contact is made by phone and email. Orders are placed directly with the manufacturer and payment is made by telegraphic transfer. The products are manufactured overseas and sent from the factory to the customers. The goods are imported into Australia by the customer. The manufacturer does not carry on any business activity in Australia and is not registered or required to be registered for 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 38-190