Private ruling: Supplies of goods connected with the indirect tax zone (Australia)
Date of advice: 1 June 2023
Published: 24 July 2023
Ruling period: All periods after the 1 July 2022
Date scheme commenced: 1 July 2022

Ruling: Q1: Do you make a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 when you sell goods to an Australian customer but make them physically available to the customer overseas? | A1: No,the supply of goods is not a taxable supply as it is not connected with the indirect tax zone.

Relevant facts and circumstances: • You are an Australian registered company • You are registered for GST with effect from the 1 July 2022 • You are a subsidiary of your parent company who are based overseas • Your parent company provide goods for customers worldwide • You are the sole distributor of your parent company's goods in Australia • You have a customer that receives the goods direct from overseas. This customer handles all the shipping/freight, customs clearance and GST on importation of these goods into Australia. • You invoice this customer for the goods received overseas and receive consideration for these goods.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services tax) Act 1999 | Section 9-25 of the A New Tax System (Goods and Services tax) Act 1999

Reasons for decision: Detailed Reasoning - Is the supply connected with the indirect tax zone?: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) defines a taxable supply as follows: 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 the indirect tax zone; (d) 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 under section 195-1 of the GST Act) Your parent company manufacture and provide goods for several different industries. You carry on an enterprise as the sole distributor of these goods in Australia. You sell these goods to Australian customers and invoices and receive consideration (payment) for these supplies. You are registered for GST. A supply of goods will not be a taxable supply unless the supply is connected with the indirect tax zone. Section 9-25 of the GST Act states a supply of goods is connected with the indirect tax zone if the goods are delivered, or made available, in the indirect tax zone to the recipient of the supply. The Goods and Services Tax Ruling, GSTR 2018/2 Goods and services tax: supplies of goods connected with the indirect tax zone (Australia) (GSTR 2018/2)explains the Commissioner's view and at paragraphs 12 and 13, states: 12. '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... 13. 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, wholly within Australia to the recipient of the supply. As such, when the goods are made available to the customer in overseas, rather than Australia and the customer is responsible for the importation of these goods into Australia (e.g. shipping/freight, customs clearance, and GST on importation) the supply is not connected with the indirect tax zone. Therefore, the requirements of paragraph 9-5(c) of the GST Act are not met. As the supply is not connected with the indirect tax zone, the supply of goods is not a taxable supply under section 9-5 of the GST Act.