Private ruling: GST and supplies to non-residents
Date of advice: 21 September 2016
Published: November 2016

Ruling: Q1: Is the supply by Entity A (you) to a non-resident of auctioneering services done in Australia GST-free under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) where the non-resident is not in Australia in relation to the supply and the auctioneer contracts on the non-resident's behalf? | A1: Yes.

Relevant facts and circumstances: You have been registered for GST from 1 July 2000. You receive bids from all over the world. Where the bidder is a non-resident they may attend the auction in person, send their bid via email or bid online. You charge an amount for your services to successful buyers being a percentage of the price paid for the purchase. You recently were requested to refund the GST portion of the price to a non-resident but believed that you were acting as the non-resident's agent in Australia and that your supply of auctioneering services was taxable. You have provided a number of tax invoices for the supplies you made to Entity B located outside of Australia.

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 38-190, and | A New Tax System (Goods and Services Tax) Act 1999 section 142.

Reasons for decision: Summary: All references to Australia mean the indirect tax zone for the purposes of the GST Act. You make a taxable supply where you satisfy section 9-5 of the GST Act. This section provides you make a taxable supply if; • you make a supply for consideration, • the supply is made in the course or furtherance of an enterprise that you carry on, • the supply is connected with the Australia, and • you are registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. You make a taxable supply under section 9-5 of the GST Act, as you make a supply of auctioneering services for a fee, the supply is in furtherance of your enterprise you carry on, the supply is connected with Australia as it is done in Australia, and you are registered or GST. However, your supply is not a taxable supply to the extent it is GST-free or input taxed. In this situation, there are no provisions that would result in the supply being input taxed, but consideration needs to be given to whether it is GST-free under subsection 38-190(1) of the GST Act. This subsection sets out supplies of things for consumption outside Australia that are GST-free and it applies to supplies of things that are not supplies of goods or real property such as services or various rights. Of particular relevant is item 2 in the table in subsection 38-190(1) of the GST Act that provides that a supply is GST-free where it is a supply to a non-resident outside of Australia when the supply is done, and (a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with real property situated in Australia; or (b) the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered or required to be registered. You have stated that some non-resident bidders attend the auction in person, some send their bid via email and some bid online. In each of these circumstances you act as agent when providing your auctioneering services. Where a non-resident bidder is in Australia in relation to the auction and a recipient of your auctioneer services your supply will not be GST-free under section 38-190 of the GST Act as your supply must be to a non-resident who is outside of Australia when the supply is done. Where, you act as agent in Australia for a non-resident and enter into a sale on their behalf your presence as a representative in Australia does not alter the fact that an individual is not physically in Australia. The ATO view for if an individual is in Australia is provided in paragraph 204 and 205 of GSTR 200/47 as: 204. As the focus is on the whereabouts of the individual to whom the supply is made, the location of a representative (including an agent) of that individual is not relevant. The In this regard, item 2 uses the words 'the non-resident who' indicating that it is only the whereabouts of the individual to whom the supply is made that is in question. 205. This means that if a non-resident sole trader carries on business or other activities in Australia through an agent and a supply is made to that non-resident but through an agent in Australia acting on behalf of the individual sole trader who is not physically in Australia when the thing supplied is done, the sole trader is not in Australia. The supply is GST-free under item 2 provided the other requirements of the item are met. Furthermore, regarding whether a company is in Australia is provided in paragraph 37 of GSTR 2004/7 as being: (a) at or through a fixed and definite place of its own for a sufficiently substantial period of time; or (b) through an agent at a fixed and definite place for a sufficiently substantial period of time. Under paragraph (a) of item 2, a supply of a thing that is made to a non-resident who is not in Australia when the thing supplied is done, is not GST-free if the supply is a supply of work physically performed on goods situated in Australia when the work is done. In this situation, the supply of auctioneering services that involves the selling of goods on behalf of a non-resident, in that the auctioneer as agent has authority to sign the sales agreement on behalf of the non-resident, is not a supply of work physically performed on goods situated in Australia when the work is done. Therefore, where you make a supply of auctioneering services to a non-resident that is not in Australia in relation to the supply it will be GST-free due to the operation of paragraph (a) in item 2 in the table in subsection 38-190(1of the GST Act.