Private ruling: GST - export and sale of machines
Date of advice: 17 April 2026
Published: 13 July 2026

Ruling: Q1: Is your sale of the X machines to Entity Y a GST-free supply under section 38-185 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You are a provider of machinery in Australia. This ruling concerns your sale of X machines (the Goods). The price for the Goods was payable to you in instalments. The Goods were originally to be sold by you to Entity X, a GST-registered Australian entity. It was originally agreed between you and Entity X that Entity X would pick up the Goods and then export the Goods. However, for various commercial reasons, the sale contract (originally between you and Entity X) was novated to an overseas company, Entity Y, pursuant to a Novation Deed (the Deed) such that the sale instead took place between you and Entity Y. Entity Y does not have an ABN and it is not registered for GST and is not required to be registered for GST. The Goods were originally intended to be sold in a chain of sales, from you to Entity X, from Entity X to Entity Y and from Entity Y to its overseas customer. Entity X was expected to be the exporter of the Goods from Australia. You invoiced Entity X a certain percent instalment of (amount) (including GST). This invoice was issued on (date). Entity X paid (amount) on (date). Entity X did not pay the GST component of this invoice. At the time, Entity X indicated that this was an administrative oversight. You remitted the GST on this instalment in your BAS for a particular tax period. You subsequently invoiced Entity X for the remainder due under the Contract (being (amount), including GST) on (date). Of this, Entity X paid (amount) on (date). You did not remit the GST on this invoice, due to the arrangements under the Deed. Importantly, since the Goods were to be made available to Entity X at your factory in Australia, the parties expected the sale of the Goods to Entity X would be a taxable supply. Under Entity X's contract with Entity Y for the subsequent sale of the Goods, Entity X was to export the Goods to the overseas country. The payment arrangements between Entity X and Entity Y differed from those between you and Entity X. Entity X invoiced Entity Y (in foreign currency) for a number of instalments between (date) and (date), totalling (amount). These amounts excluded GST (since the sale by Entity X to Entity Y was to be GST-free as an export sale). The Deed provides for amendments to the sale contract to deal with the new arrangements. It provides that the Goods would be sold on FCA terms at (place). Under FCA terms, the seller delivers the goods to the buyer at the named place but clears the goods for export. You entered the Goods for export within the meaning of section 113 of the Customs Act 1901 . Entity Y hired a shipping company to ship the Goods to an overseas country, and the Goods were shipped to that overseas country on (date). You have provided to the Australian Taxation Office the Bill of Lading issued on this date and the Export Authority dated (date). The Goods were not used or altered in any way between the time you supplied them to Entity Y and the time of export. Between (date) and (date), you issued X invoices to Entity Y covering the sale of the Goods under the revised arrangements. These invoices did not include GST because you understood that the status of your sale of the Goods to Entity Y as a result of the terms of the amended sale contract would be GST-free. The first invoice you issued to Entity Y was issued on (date), which was for the final instalment payment. Entity Y paid the final instalment to you on (date). Entity Y delivered a security in the form of a cash bond to the value of (amount) to you. This security was to be held pending confirmation from the Australian Taxation Office that the sale of the Goods is GST-free. Once that confirmation is given to you, the security would be refunded to Entity Y. In a particular BAS, you claimed a refund of the GST paid in an earlier BAS on monies you had received from Entity X in respect of the sale of the Goods.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-185

Reasons for decision: Summary: You are treated as the exporter of the Goods for GST purposes under a deeming rule and the requirement to export the goods within 60 days was met. Therefore, your sale of the Goods is GST-free under section 38-185 of the GST Act. | Detailed Reasoning - Detailed reasoning: Item 2 in the table in subsection 38-185(1) of the GST Act provides that a supply of goods for which the consideration is provided in instalments under a contract that requires the goods to be exported is GST-free, but only if the supplier exports them from Australia within 60 days (or such further period as the Commissioner allows) after: (a) the day on which the supplier receives any of the final instalment of the consideration for the supply; or (b) if, on an earlier day, the supplier gives an invoice for that final instalment - the day on which the supplier gives the invoice. Subsection 38-185(3) of the GST Act provides that without limiting items 1 and 2 in the table in subsection (1), a supplier is treated, for the purposes of those items, as having exported the goods from Australia if: (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) the 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 have not been 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; and (f) it that entity is covered by paragraph 168-5(1A)(c) - the supplier has a declaration by that entity stating that: (i) a payment has not been sought under section 168-5 for the supply; and (ii) if the goods are wine - a payment has not been sought under section 25-5 of that Act for the supply. Before the Goods were exported, you supplied the Goods to Entity Y, which is not registered or required to be registered for GST. Therefore, you meet the requirement of paragraph 38-185(3)(a) of the GST Act. Entity Y exported the Goods from Australia. Therefore, you meet the requirement of paragraph 38-185(3)(b) of the GST Act. The Goods were entered for export within the meaning of section 113 of the Customs Act 1901 . Therefore, you meet the requirement of paragraph 38-185(3)(c) of the GST Act. Since you supplied the Goods to your buyer, Entity Y, but prior to export, the Goods were not altered or used in any way, except to the extent if any necessary to prepare them for export. Therefore, you meet the requirement of paragraph 38-185(3)(d) of the GST Act. You have sufficient documentary evidence to show that the Goods were exported. Therefore, you meet the requirement of paragraph 38-185(3)(e) of the GST Act. Paragraph 168-5 of the GST Act is not applicable in your case. Therefore, paragraph 38-185(3)(f) of the GST Act is not applicable in your case. As the requirements of subsection 38-185(3) of the GST Act are met, you are treated as having exported the Goods. Under the original contractual arrangements (which were between you and Entity X), you issued an invoice to Entity X on (date) for an amount that was previously intended to be the final instalment (amount). However, due to the change in contractual arrangements post novation of the contract, the actual final instalment was (amount) which you invoiced Entity Y for on (date). The actual final instalment was paid after issue of that invoice. Therefore, we consider that the 60 day period prescribed under section 38-185 of the GST Act starts on the day after (date), being the date of issue of the invoice for the actual final instalment. As your buyer exported the Goods within 60 days after you issued an invoice for the actual final instalment and the requirements of subsection 38-185(3) of the GST Act are met, your sale of the Goods to Entity Y is GST-free under item 2 in the table in subsection 38-185(1) of the GST Act.