Private ruling: Importation
Date of advice: 28 June 2019
Published: September 2019

Ruling: Q1: Is the re-importation of the vessel into Australia a non-taxable importation under section 42-10 of the A New Tax System (Goods and Service Tax) Act 1999 (GST Act)? | A1: No, the re-importation of the vessel into indirect tax zone is not a non-taxable importation under section 42-10 of the GST Act.

Relevant facts and circumstances: The vessel was built and launched in 20XX and was imported into Australia sometime before mth/ 20XX. The previous owner purchased the vessel in mth/20XX. Previous owner lived aboard the vessel and cruised up and down the east coast of Australia. Under the agreement you and previous owner agreed that the vessel is to be exported within 60 days of settlement of the agreement therefore the sale was not subject to GST. In mth/20XX, you exported the vessel from Australia. You are now planning to arrive on the Australian east coast before the cyclone season starts in mth/20XX. You intend to reimport the vessel into Australia upon arrival. The vessel has not been subject to any treatment, industrial processing, repair, renovation or any other process since its export in mth/20XX. You were not entitled to and did not claim a payment under Division 168 of the GST Act on the export of the vessel.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 13-5 | A New Tax System (Goods and Services Tax) Act 1999 section 13-10 | A New Tax System (Goods and Services Tax) Act 1999 section 42-10

Reasons for decision: Detailed Reasoning - Taxable importation: Under section 13-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you make a taxable importation if: (a) goods are imported; and (b) you enter the goods for home consumption (within the meaning of the Customs Act 1901 ) However, the importation is not a taxable importation to the extent that it is a * non-taxableimportation. Goods and Services Tax Ruling GSTR 2003/15 provides guidance on the operation of the provisions in the GST Act which apply to the importation of goods into Australia. (GSTR 2003/15 is available at the Australian Taxation Office website at www.ato.gov.au). Goods are typically imported into Australia when they are brought to Australia to be unloaded or landed here. 'Imported' in this context has its ordinary meaning. If you lodge an import entry in your name as the 'owner' of the goods, you enter the goods for home consumption within the meaning of the Customs Act; and you are liable to pay GST on that importation if the importation is taxable importation. Based on the facts provided, the vessel is going to be imported into Australia. Both paragraphs (a) and (b) of section 13-5 of the GST Act are satisfied therefore your importation of the vessel is a taxable importation unless the circumstances surrounding the importation make it a non-taxable importation. | Detailed Reasoning - Non-taxable importation: Under section 13-10 of the GST Act, an importation is a non- taxable importation if: (a) it is a non-taxable importation under Part 3-2; or (b) it would have been a supply that was GST-free or input taxed if it had been a supply. Part 3-2 of the GST Act, particularly section 42-5 of the GST Act, deals with importation of goods that are non-taxable importations in accordance with the Customs Tariff Act 1995 . As the Customs Tariff Act 1995 is administered by Customs, it is a matter for Customs to determine if an importation is covered by items referred to in section 42-5 of the GST Act. There are no provisions in the GST Act under which the supply of the vessel would be GST-free or input taxed. Therefore, the importation of the vessel is not a non-taxable importation under paragraph 13-10(b) of the GST Act as the importation would not have been a GST-free or input taxed supply if it had been a supply. Subsection 42-10(1) of the GST Act provides for goods originally exported from Australia to be re-imported into Australia as non-taxable importations, where the goods are returned to Australia in an unaltered condition. Under subsection 42-10(1) of the GST Act, an importation of goods is a non-taxable importation if: (a) the goods were exported from the indirect tax zone and are returned to the indirect tax zone, without having been subject to any treatment, industrial processing, repair, renovation, alteration or any other process since their export; and (b) the importer was not entitled to, and did not claim, a payment under Division 168 (about the tourist refund scheme) related to the export of the goods; and (c) the importer: (i) is the manufacturer of the goods; or (ii) has previously acquired the goods, and the supply by means of which the importer acquired the goods was a * taxable supply (or would have been a taxable supply but for section 66-45); or (iii) has previously imported the goods, and the previous importation was a * taxable importation in respect of which the GST was paid. In order for the vessel to be non-taxable importation, you have to satisfy all the paragraphs in subsection 42-10(1) of the GST Act. The supply of the vessel made to you was not a taxable supply. According to your contract with the previous owner the vessel was not subject to GST as you and the previous owner agreed to export the vessel within 60 days of the settlement date. Division 66-45 applies if the previous owner purchased the boat as part of an acquisition of second hand goods that would be divided for re-supply. Based on the information that has been provided previous owner acquired the boat and used it for private purposes rather than for re-supply. You do satisfy paragraph (a) and (b) of subsection 42-10(1) of the GST Act but do not satisfy paragraph (c) of subsection 42-10(1) of the GST Act because · you are not a manufacturer of the vessel; or · you have not acquired the vessel previously as a taxable supply; or · you did not import the vessel previously. You do not satisfy the requirements of subsection 42-10(1) of the GST Act and therefore the importation of the vessel is not a non-taxable importation under subsection 42-10(1). Subsection 42-10(2) of the GST Act covers goods that an importer had manufactured, acquired or imported before 1 July 2000. As you acquired the goods after 1 July 2000, subsection 42-10(2) has no application. Accordingly, the re-importation of the vessel into Australia is not a non-taxable importation under section 42-10 of the GST Act.