Private ruling: GST and export of goods
Date of advice: 27 June 2016
Published: August 2016

Ruling: Q1: Is the supply of the goods by an Australian entity (you) to a non-resident entity GST-free , where you export the goods from Australia to overseas? | A1: Yes, the supply of the goods by you to the non-resident entity is GST-free under Items 1 in the table in subsection 38-185(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Relevant facts and circumstances: • You are an Australian entity which is registered for GST in Australia. • You have a supply agreement (Agreement) with the non-resident entity to supply various types of goods for export to overseas. • The non-resident entity is a non-resident entity which is not registered for GST in Australia. • You receive purchase orders from the Company A for the supply of the goods to the non-resident entity overseas. • The Company A is an Australian company which is registered for GST. • The Company A is acting as a procurement agent for the non-resident entity. • Under the Agreement: • You as a supplier acquire the goods and sell those to the non-resident entity or the Company A pursuant to a purchase order. • You are responsible and liable for the freight costs charged by the freight forwarder in sending the goods to overseas. • The non-resident entity inspects the goods on arrival and reports any damage to you within 5 days of the goods arriving at the delivery location for replacement under the insurance cover. • Upon delivery of the goods to the delivery location, you issue the tax invoice to the non-resident entity. • You claim input tax credits (ITC) in your activity statement for the acquisition of the goods. • Any ITC received by you for your acquisition of the goods will be applied towards reduction of the loan. • After receiving purchase order from the Company A, you purchased the goods from another Australian company on XXXXXX. • You issued a tax invoice for the supply of the goods to the non-resident entity on YYYYYY. • You contracted a shipping agent to transport the goods from Australia to overseas. • The goods were exported from Australia to overseas on ZZZZZZ. • You have provided a copy of a tax invoice from the shipping agent for the freight charges showing you as the sender and the receiver being the non-resident entity.

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 38-185 | A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-185(1) | A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-185(3)

Reasons for decision: Detailed Reasoning - Taxable supply: 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). 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 goods to the non-resident entity 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 non-resident entity is taxable to the extent that it is not GST-free or input taxed. From the facts given, your supply of the 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 discusses the GST-free exports of goods. Specifically, item1 in the table in subsection 38-185(1) of the GST Act (Items 1) is relevant in this circumstance. They state: | Detailed Reasoning - These supplies are GST-free: 1 Export of goods - general 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. (* denotes a defined term under section 195-1 of the GST Act) Accordingly, your supply of goods will be GST-free if all the conditions of Item 1 above are satisfied. Goods and Services Tax Ruling GSTR 2002/6 at paragraphs 32 to 35 describes the requirements of Items 1 and 2. Under Item 1, a supply of goods is GST-free where the supplier exports them from Australia and the export occurs within a specified time period. Item 1 applies to export of goods generally. For a supply of goods to be GST-free under Items 1, the supplier must export the goods before, or within a 60 day period (or such further period as the Commissioner allows). Supplier is the entity that exports The requirement that the supplier is the entity that exports the goods is satisfied where: • the supplier contracts at their own expense with an international carrier for the transportation of the goods to a destination outside Australia; or • the supplier is responsible for delivering the goods to the operator of a ship or aircraft that has been engaged by another party to transport those goods to a destination outside Australia; or • the requirements of subsection 38-185(3) of the GST Act are met. From the facts given, you supplied the goods to the non-resident entity is neither registered, nor required to be registered, for GST in Australia . You contracted the shipping agent, and arranged to transport the goods from Australia to overseas. The shipping agent's tax invoice for freight service charges shows you as the sender and the receiver being the non-resident entity (overseas). You are responsible/liable (at your own expense) to pay the freight service (and insurance) costs to the freight forwarder. Hence, we consider that you (the supplier) have exported the goods to a destination outside Australia. The goods were exported from Australian to overseas on ZZZZZZ. You have sufficient documentary evidence to prove that the goods were exported to overseas. On the basis of these facts, you are deemed to have exported the goods to a destination outside Australia and the requirement that the supplier is the entity that exports the goods is satisfied. The next step is to determine whether the goods were exported from Australia within the 60-day period. 60-day period for export of goods The supply of goods is GST-free under Item 1 if the goods are exported by the supplier 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 consideration for the goods; or (b) the day on which the supplier issues an invoice for the goods. The supply of the goods by you to the non-resident entity will be GST-free if you export the goods before, or within the 60-day period. From the facts provided, the non-resident entity ordered the goods to export to overseas. You issued a tax invoice for the goods and on YYYYYY. The goods were exported from Australia on ZZZZZZ. You have a copy of the tax invoice from Cargo which verifies that the goods were exported to overseas on ZZZZZZ. Therefore, the goods were exported from Australia within 60 days after the day on which you issued the invoice. Accordingly, the supply of the goods by you to the non-resident entity satisfies all the requirements in Item 1 and the supply is GST-free under subsection 38-185(1) of the GST Act.