Private ruling: GST and export goods
Date of advice: 29 May 2018
Published: August 2018

Ruling: Q1: Will the supply of goods by an Australian entity (you) to Australian customers subject to GST? | A1: Your supply of goods to the Australian customers will be GST-free, where the goods are exported from Australia before or within 60 days after the earlier of consideration being received or an invoice being issued and the Australian customers are not registered or required to be registered for GST in Australia. You must obtain and hold sufficient documentary evidence to show that the goods are exported within 60 days. Your supply of goods to the Australian customers will be a taxable supply under section 9-5 of the GST Act where the Australian customers are registered or required to be registered for GST in Australia and you will be liable for GST on the supply of the goods.

Relevant facts and circumstances: You are an Australian entity who is registered for GST in Australia. You operate a retail and export business in Australia and specialises in selling Australian products to overseas customers and Australian customers at a premium price. The Australian customers are individual personal shoppers who purchase the goods on behalf of the non-residents to export to overseas. Normally the Australian customers buy the goods to be shipped to their families and friends. They purchase the goods which are manufactured in Australia, because they trust the quality of the Australian brands. You are not aware whether the Australian customers are registered or required to be registered for GST in Australia. The Australian Customers walk into your shop and buy the goods from you to export to overseas. Then they pay you and request you to pack and arrange the freight forwarder to transport the goods to overseas. After receiving the payment for the goods and shipping, you pack the goods and arrange a courier to send the goods to the freight forwarding company within 20 working days. You will not be responsible for contracting a carrier to transport and export the goods from Australia to overseas destination. The goods are exported from Australia to overseas destination within 20 working days after receiving the payment for the goods and transport costs. In some cases, the Australian customers purchase the goods from you and arrange the shipment themselves to export the goods overseas.


Reasons for decision: Summary: GST is payable on a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Detailed Reasoning - Taxable supply: GST is payable on a taxable supply. Section 9-5 of the GST Act states : 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 (Australia); and (d) 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. Your supply of the goods will be taxable if all the requirements in section 9-5 of the GST Act are satisfied. From the facts given, you have satisfied all the conditions of paragraphs 9-5(a) to (d) of the GST Act, as follows: (a) you make the supply of the goods to the Australian customers and in return you receive consideration for the supply by way of payment(s); (b) you make the supply in the course or furtherance of your business; (c) the supply involves goods being removed from Australia (and therefore the supply is connected with Australia); and (d) you are registered for GST in Australia. Hence, your supply of goods to the Australian customers is taxable to the extent that it is not GST-free or input taxed. From the facts given, your supply of goods does not satisfy the input taxed provisions under the GST Act. The GST-free provisions must also be taken into consideration. | Detailed Reasoning - Section 38-185 and GST-free supply: Section 38-185 of the GST Act covers the GST-free export of goods. A supply is GST-free under Item 1 in the table in subsection 38-185(1) of the GST Act (Item 1) if the supply is: a supply of goods, but only if the supplier exports them from Australia before, or within 60 days (or such further period as the Commissioner allows) after: (a) the day on which the supplier receives any of the consideration for the supply; or (b) if, on an earlier day, the supplier gives an invoice for the supply - the day on which the supplier gives the invoice. Goods and Services Tax Ruling GSTR 2002/6 covers the export of goods. For a supply of goods to be GST-free under Item 1 the supplier must export the goods before, or within a 60-day period (or such further period as the Commissioner allows). | Detailed Reasoning - Supplier is the entity that exports: The facts indicate that Australian customers (recipient of the supply) will be responsible for contracting a carrier to transport and export the goods from Australia to the overseas destination. In this circumstance, subsection 38-185(3) of the GST Act is taken into consideration, and operates to treat the supplier in certain circumstances as having exported the goods when in fact the recipient e xports the goods. A supplier who is not an exporter of the goods is treated as the exporter where the recipient exports, if the following requirements in subsection 38-185(3) of the GST Act are satisfied: (a) Before the goods are exported, the supplier supplies them to an entity that is not registered or required to be registered for GST; and (b) that entity exports the goods from Australia; and (c) the goods have been entered for export with the meaning of section 113 of the Customs Act 1901 ; and (d) since their supply to that entity, the goods are not altered or used in any way, except to the extent (if any) necessary to prepare them for export; and (e) the supplier has sufficient documentary evidence to show that the goods were exported. Where all the above requirements are satisfied, the supply can still be GST-free. From the facts provided, you supply the goods to the Australian customers for export to overseas. The Australian customers are responsible for arranging the transportation and export of the goods to overseas. You advised us that you are not aware whether the Australian customers are registered or required to be registered for GST in Australia. In the circumstances where the Australian customers are registered or required to be register for GST in Australia, the requirement in subsection 38-185(3) of the GST Act that the supplier supplies the goods to an entity that is not registered for GST will not be satisfied. Accordingly, the supply of the goods by you to the Australian customers will not be GST-free under section 38-185 of the GST Act. The supply of the goods by you to the Australian customers will be a taxable supply under section 9-5 of the GST Act and you will be liable for GST on that supply. In the circumstances where the Australian customers are not registered or required to be register for GST in Australia, the requirement in subsection 38-185(3) of the GST Act that the supplier supplies the goods to an entity that is not registered or required to be registered for GST will be satisfied. Accordingly your supply of goods will be GST-free where the goods are exported from Australia within 60 days period and the Australian customers are not registered or required to be registered for GST in Australia. You must obtain and hold sufficient documentary evidence to show that the goods are exported by that date.