Private ruling: GST and acquisition of supply from a re-deliverer
Date of advice: 3 October 2018
Published: November 2018

Ruling: Q1: Is the supply made by the re-deliverer to you a taxable supply for the purposes of the A New Tax Services (Goods and Services Tax) Act 1999 (GST Act) regarding the purchase of low value imported goods made by you from overseas merchants before 1 July 2018 and delivered to you by the re-deliverer after 1 July 2018 Advice From the facts given, the new law for low value imported goods does not apply to the re-deliverer in this case as the purchases and payments for these low value imported goods were made before 1 July 2018 despite the goods arrived in Australia after 1 July 2018. However, for the supply of shipping and services made by the re-deliverer when organising the shipping of the goods purchased before 1 July 2018, the supply of shipping and services is a taxable supply under section 9-5 of the GST Act and subject to GST to the extent that the supply of shipping and services is not GST-free. Where the supply of shipping and services are any of the services described in items 5, 5A, 6 and 7 in the table in subsection 38-355(1) of the GST Act, the supply of the shipping and services is GST-free under the item in which the shipping and services have satisfied the requirements. If the re-deliverer is making a mixed supply of GST-free and taxable supplies for the shipping and services it will have to apportion the consideration received on a reasonable basis between the GST-free supply and taxable 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 subsection 9-25(5) | A New Tax System (Goods and Services Tax) Act 1999 section 84-75 | A New Tax System (Goods and Services Tax) Act 1999 section 84-81 | A New Tax System (Goods and Services Tax) Act 1999 section 84-91 | A New Tax System (Goods and Services Tax) Act 1999 section 38-355 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: Note : Where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in section 195-1 of the GST Act. | Detailed Reasoning - New law for low value imported goods: From 1 July 2018 sale of low value goods imported by consumers into Australia is connected with Australia. Businesses that meet the registration threshold of A$75,000 will need to register for GST and charge GST on sales of low value imported goods unless they are GST-free. These businesses may be merchants who sell goods, electronic distribution platform operators or re-deliverers. The re-deliverer for GST purposes is required to collect GST on its supplies under the new law for low value imported goods to the extent that the supply is not GST-free or input taxed. Accordingly any purchases you make from 1 July 2018 will be subject to the new law of low value imported goods. | Detailed Reasoning - Transitional rules for the new law for low value imported goods: GST will generally apply to sales of goods where the invoice is issued or payment is received on or after 1 July 2018. GST will not apply to sales made earlier (unless GST applies under existing rules) even if the goods do not reach Australia until after 1 July 2018. From the information given, you purchased and paid for the purchases of low value goods before 1 July 2018. In this instance the new law for low value imported goods does not apply to the supply made by the re-deliverer to you despite the fact the purchased goods were sent to you after 1 July 2018. We will now consider the GST consequences of the supply of shipping and services for the purchases made before 1 July 2018. | Detailed Reasoning - Supply of services: GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if: a) the supplier makes the supply for consideration; and b) the supply is made through a business that the supplier carries on; and c) the supply is connected with Australia; and d) the supplier is registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. From the facts given, the re-deliverer’s supply of shipping and services to you is a taxable supply and subject to GST to the extent that the supply of shipping and services is not GST-free. The supply of shipping and services is not input taxed under the GST law. GST-free supply From the facts given, the re-deliverer organises the transport of the purchased goods to Australia for you. Relevant to the supply of shipping and services made by the re-deliverer will be items 5, 5A, 6 and 7 in the table in subsection 38-355(1) of the GST Act. The items appear as followed: | Detailed Reasoning - These supplies are GST-free...: 5 Transport etc. of goods subject to subsections (2) and (3), the *international transport of goods: (a) from their *place of export in the indirect tax zone to a destination outside the indirect tax zone; or (b) from a place outside the indirect tax zone to their *place of consignment in the indirect tax zone; or (c) from a place outside the indirect tax zone to the same or another place outside the indirect tax zone. 5A Loading or handling etc. subject to subsections (2) and (3): (a) loading or handling of goods, the *international transport of which is covered by item 5, during the course of the international transport; or (b) supply of a service, during the course of the international transport of goods covered by item 5, that facilitates the international transport. 6 Insuring transport etc. subject to subsection (3): (a) insuring transport covered by item 1, 2, 3 or 4; or (b) insuring the *international transport of goods from their *place of export in the indirect tax zone to a destination outside the indirect tax zone; or (c) insuring: (i) the transport of goods from a place outside the indirect tax zone to their *place of consignment in the indirect tax zone; and (ii) the subsequent transport of those goods within the indirect tax zone, if it is an integral part of the transport of goods from the place outside the indirect tax zone to the place of consignment in the indirect tax zone; including loading and handling within the indirect tax zone that is part of that transport; or (d) insuring the transport of goods from a place outside the indirect tax zone to the same or another place outside the indirect tax zone. 7 Arranging transport etc. subject to subsection (3): (a) arranging transport covered by item 1, 2, 3 or 4; or (b) arranging the *international transport of goods covered by item 5; or (c) arranging insurance covered by item 6. (*indicates a defined term in section 195-1 of the GST Act) Where the supply of shipping and services made by the re-deliverer includes any of the services described under item 5, 5A, 6 and 7 in the table in subsection 38-355(1) of the GST Act, the supply of the services is GST-free. Subsections 38-355(2) and (3) do not apply to the services. However, where there are other services provided in addition to those described in items 5, 5A, 6 and 7 in the table in subsection 38-355(1) of the GST Act, the supply of these other services will be subject to GST as these supplies are taxable supplies under section 9-5 of the GST Act. If the re-deliverer is making a mixed supply of GST-free and taxable supplies for the shipping and services, it will have to apportion the consideration received on a reasonable basis between the GST-free supply and taxable supply.

Relevant facts: You live in Australia and are not registered for GST. You have an account with a re-deliverer. | The re-deliverer provides parcel forwarding services and you need to pay delivery fees to it when using this service. From your account with the re-deliverer you can manage your purchases and delivery to Australia. | The re-deliverer provides an overseas delivery address to Australians who register an account with it. With the overseas delivery address the Australian members can shop at online stores that only ship to overseas addresses. The re-deliverer will notify the Australian members once their shopping arrives at its overseas address and then deliver it to the Australian member in Australia. | You use the overseas address when making online purchases from American merchants who will then shipped your purchased goods to that overseas address. The re-deliverer upon receipt of your purchases will bundle the purchases at your request and shipped them to you. | Before 1 July 2018 you made some purchases from overseas merchants and paid for the purchases at the same time. You did not pay any GST for the purchase made from the overseas merchants and requested for the purchases to be sent to the overseas address given by the re-deliverer. | You requested the re-deliverer to bundle the purchases and to ship them to Australia. | After 1 July 2018 you have received an invoice from the re-deliverer regarding the shipping of the purchases made from the American merchants before 1 July 2018. The re-deliverer has charged you GST on the redelivery of the goods and GST for shipping and service fee. The purchased goods arrived in Australia after 1 July 2018.