Private ruling: GST and sale of goods
Published: April 2013

Ruling: Q1: Is your sale of the goods GST-free? | A1: No, your sale of the goods is not GST-free, except where you export the goods within certain time limits. Where you do not export the goods, but sell the goods within Australia, your sale of the goods will be a taxable supply and goods and services tax (GST) will be payable on the sale.

Relevant facts and circumstances: You are registered for GST. You carry on an enterprise of selling goods. The goods are not food for human consumption and do not otherwise fall within the definition of food for GST purposes. Presently, you only sell the goods within Australia, but you may export the goods in the future.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 7-1 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-2 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-3 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-4(1) | A New Tax System (Goods and Services Tax) Act 1999 Section 38-185

Reasons for decision: Summary: Section 7-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that GST is payable on taxable supplies. Under section 9-5 of the GST Act, you make a taxable supply if: · you make the supply for consideration · the supply is made in the course of carrying on an enterprise · the supply is connected with Australia, and · you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. There are no provisions in the GST Act to make your sale of the goods input taxed. With respect to GST-free supplies, section 38-2 of the GST Act provides that a supply of food is GST-free, if the goods satisfy the definition of food in section 38-4 of the GST Act, and the supply is not excluded from being GST-free by section 38-3 of the GST Act. 'Food' is defined in subsection 38-4(1) of the GST Act to include (among other things) food for human consumption. As the goods are not food for human consumption and do not otherwise fall within the definition of food for GST purposes, your sale of the goods is not a GST-free supply of food. There are no other provisions in the GST Act to make your sale of the goods GST-free, except for the provisions dealing with the GST-free exports of goods. In general terms, section 38-185 of the GST Act provides that a supply of goods by way of export is GST-free, if the goods are exported from Australia before, or within 60 days after, the first of the following two events: · the supplier receives any payment for the goods, or · the supplier issues an invoice for the goods. Where exported goods are paid for by instalments, the payment referred to above, is the payment of any part of the final instalment, and the invoice referred to above, is the invoice for the final instalment. Please note, the supplier can apply to the Commissioner to extend the 60 day period above. Therefore, where you export the goods within the 60 day period above (or such further period as the Commissioner allows), your sale of the goods by way of export will be GST-free. However, as there are no provisions in the GST Act to make your sale of the goods within Australia GST-free, your sale of the goods within Australia will be a taxable supply where all of the other requirements of section 9-5 of the GST Act are satisfied. In this case, you are registered for GST, and your sale of the goods within Australia: · is a supply for consideration (being the payment you receive for the sale) · is made in the course of carrying on an enterprise (being your enterprise of selling goods), and · is a supply connected with Australia (being a supply of goods wholly within Australia). Therefore, your sale of the goods within Australia meets all of the requirements for a taxable supply under section 9-5 of the GST Act and as such, GST is payable on the sale.