Private ruling: Goods and services tax (GST) and supply of automated call service
Date of advice: 11 April 2019
Published: May 2019

Ruling: Q1: Will GST be payable on your supply of automated calling service provided to an individual where the individual and the party who contracts you to provide the service are overseas? | A1: No.

Relevant facts and circumstances: You are registered for GST. You will make supplies of automated calling service through a computer programmed and sourced in an overseas country. The service will involve ringing individuals to ascertain their wellbeing. The recipients of your supplies (your customers who contract you to provide the service) will be non-residents based solely overseas at the time of supply. The recipients of your supplies will require you to provide the service to individuals other than the recipients (those individuals will be called through the automated service). Those individuals will also be non-residents based overseas and will not be in Australia at the time of supply.

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

Reasons for decision: Summary: GST will not be payable on your supply of the automated calling service as this supply will be GST-free under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Detailed Reasoning - Detailed reasoning: GST is payable on taxable supplies. An entity makes a taxable supply where it meets the requirements of section 9-5 of the GST Act, which states: You make a taxable supply if (a) you make the supply for *consideration; and (b) you make the supply in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with the indirect tax zone. (d) you are *registered, or *required to be registered. However, a supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (*Denotes a term defined in the GST Act) The indirect tax zone is mainly Australia (excluding Australian external Territories). A supply of anything other than goods or real property (for example services), to a non-resident who is not in Australia at the time of supply can be GST-free under item 2 in the table in subsection 38-190(1) of the GST Act (item 2) if: (a) the supply is neither a supply of work physically performed on goods situated in the indirect tax zone when the work is done nor a supply directly connected with real property situated in the indirect tax zone, or (b) the non-resident acquires the services in carrying on the non-resident’s enterprise, but is not registered or required to be registered for GST. However, the supply would not be GST-free if an exclusion in subsection 38-190(2), 38-190(2A) or 38-190(3) of the GST Act applies. Subsection 38-190(2) of the GST Act deals with supplies of rights. 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 the indirect tax zone that would be wholly or partly *input taxed under Subdivision 40-B or 40-C. Subsection 38-190(3) of the GST Act states: Without limiting subsection (2) or (2A), a supply covered by item 2 in the table is not GST-free if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity in the indirect tax zone; and (c) for a supply other than an *input taxed supply – none of the following applies: (ii) the other entity would be an *Australian-based business recipient of the supply, if the supply had been made to it; (iii) the other entity is an individual who is provided with the supply as an employee or *officer of an entity that would be an Australian–based business recipient of the supply, if the supply had been made to it; or (iv) the other entity is an individual who is provided with the supply as an employee or officer of the *recipient and the recipient’s acquisition of the thing is solely for a *creditable purpose and is not a *non-deductible expense. You will make supplies of a service – the automated calling service to check on an individual’s wellbeing. The recipients of your supplies will be non-residents based solely overseas at the time of supply of the services. You will be required to provide your services to individuals other than those recipients, and those individuals will also be non-residents who are based overseas and will not be in Australia at the time of supply. Your supplies will not involve work physically performed on goods, nor will they be directly connected with real property. Therefore, your supplies will meet the requirements of item 2. Additionally, your supplies will not be excluded from being GST-free by subsections 39-190(2), 38-190(2A) and 38-190(3A). Therefore, your supplies of the automated calling service will be GST-free under item 2. Hence, GST will not be payable on your supplies of the service. Goods and Services Tax Ruling GSTR 2004/7 and Goods and Services Tax Ruling GSTR 2005/6 are relevant in the application of item 2. You can find these publications on the ATO website at www.ato. gov.au.