Private ruling: GST and supply of goods
Date of advice: 20 September 2016
Published: November 2016

Ruling: Q1: Will your supply of goods be subject to GST where the goods are acquired by you from outside the indirect tax zone and delivered directly to your customer in another place outside the indirect tax zone? | A1: No. Your supply of the goods that are acquired by you from outside the indirect tax zone and delivered directly to your overseas customer will not be subject to GST. Your supply will not be connected with the indirect tax zone under section 9-25 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) as the goods will not be delivered or made available in the indirect tax zone to the recipient of the supply. Furthermore, the goods will not be exported from or imported into the indirect tax zone. As such, your supply of the goods will not be a taxable supply under section 9-5 of the GST Act and will not be subject to GST. | Q2: Will you be required to be registered for GST where the only supplies that you will make are the supplies of the goods referred to in question 1? | A2: No. You will not be required to be registered for GST where the only supplies that you will make are the supplies of the goods referred to in question 1. Your supplies of the goods will be disregarded in calculating your current and projected GST turnover as they will not be connected with the indirect tax zone. Therefore, your GST turnover will not meet the registration turnover threshold and you will not be required to be registered for GST under section 23-5 of the GST Act where they are the only supplies that you will make.

Relevant facts and circumstances: You are an Australian company incorporated in 20XX. You are not registered for GST. You will purchase goods from a supplier outside the indirect tax zone and sell them to a customer in another place outside the indirect tax zone. The goods will be shipped from the supplier directly to your customer. No goods will be imported into the indirect tax zone. You are not acting as agent for either the supplier or the customer. You are purchasing and selling the goods in your own right. The only supplies that you will make are the supplies of the goods which you will purchase from outside the indirect tax zone and delivered directly to the customer in another place outside the indirect tax zone. All transactions will be undertaken at arms-length and not with related entities. Your directors will handle the administration of the business transactions as well as the payment and receipt of funds for the buying and selling of the goods. You expect to generate sales of more than $75,000 in the first 12 months of your trading.

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 9-25, | A New Tax System (Goods and Services Tax) Act 1999 section 23-5, | A New Tax System (Goods and Services Tax) Act 1999 section 188-10, | A New Tax System (Goods and Services Tax) Act 1999 section 188-15 and | A New Tax System (Goods and Services Tax) Act 1999 section 188-20.