Private ruling: GST and the supply of services
Date of advice: 23 April 2026
Published: 13 July 2026
Date scheme commenced: 30 June 2026

Ruling: Q1: Is the supply of services made by you to the non-resident a GST-free supply under section 38-190 of the A New Tax System (Goods and Services Tax) Act 1999 ? | A1: Yes. your supply of services is GST-free


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.

Reasons for decision: Detailed Reasoning - Taxable supply: Under section 9-5 of the GST Act, a supply is a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with the indirect tax zone; and (d) you are *registered, or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (terms marked with asterisks (*) are defined in section 195-1 of the GST Act) Your supply of services satisfies paragraphs (a) to (d) in section 9-5 of the GST Act because: (a) the supply is made for consideration; and (b) the supply is made in the course of an enterprise that you carry on (and you do not supply your services as an employee of the non-resident); and (c) the supply of service is connected with the indirect tax zone as it is made through an enterprise that you carry on in the indirect tax zone; and (d) you are registered for GST. Accordingly, your supply would be a taxable supply unless it is GST-free or input taxed. There is no provision in the GST Act that makes your supply of services input taxed. It is therefore necessary to consider whether the supply is GST-free under Division 38 of the GST Act. | Detailed Reasoning - GST-free supplies: Relevant to your supply of services is, Item 2 in the table in subsection 38-190(1) of the GST Act (Item 2). Under Item 2, a supply is GST-free if it is: ....a supply that is made to a * non - resident who is not in the indirect tax zone when the thing supplied is done, and: (a) the supply is neither a supply of work physically performed on goods situated in the indirect tax zone when the work is done, nor a supply directly connected with real property situated in the indirect tax zone; 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. In this regard it needs to be determined whether: | Detailed Reasoning - Non-resident recipient: Paragraph 27 of the Goods and Services Tax Ruling GSTR 2004/7 Goods and services tax: in the application of items 2 and 3 and paragraph (b) of item 4 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 states: A recipient, in relation to a supply, is the entity to which the supply was made ... You have been appointed by the non-resident, and you deal directly with the non-resident. Your fees are fixed by the non-resident at the completion of your services, and you have recourse against the non-resident for any non-payment of fees for your services. The contractual 'agreement' to supply your services is between yourself, and the non-resident is the recipient of your supplies of services. Paragraph 41 of the Goods and Services Tax Ruling GSTR 2025/1 Goods and services tax: supplies of things (other than goods or real property) made to non-residents but provided to another entity in Australia provides the meaning of non-resident. | Detailed Reasoning - The meaning of non-resident: 41. The term 'non-resident' is defined in section 195-1 to mean 'an entity that is not an Australian resident'. 'Australian resident' is defined in section 195-1 to mean 'a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). You have advised that the entity you have an agreement with is a non-resident entity. The requirement that the non-resident in Item 2 is not in Australia when the thing supplied is done requires that the non-resident is not in Australia in relation to the supply at that time. GSTR 2004/7 explains when a non-resident is not in Australia when the thing supplied is done for the purposes of Item 2 and paragraph (b) of Item 4. 34. We determine whether the not in Australia requirement is satisfied by determining whether the non-resident entity is in Australia in relation to the supply. If the entity is in Australia in relation to the supply, the entity does not satisfy the not in Australia requirement. You have advised that the non-resident is located outside of the indirect tax zone and that it does not have any presence in Australia at the time you supply your services. There is no branch of the non-resident in Australia. You dealt directly with the non-resident that is outside of the indirect tax zone. On this basis, the non-resident is not in Australia in relation to the supply when the services are performed. Accordingly, this requirement of Item 2 is satisfied. It needs to be also determined if one of the paragraphs of Item 2 is satisfied. In this regard we have considered paragraph (a) in Item 2. | Detailed Reasoning - Paragraph (a) in Item 2: The Goods and Services Tax Ruling GSTR 2003/7 Goods and Services Tax: what do the expressions 'directly connected with goods or real property' and 'a supply of work physically performed on goods' mean for the purposes of subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 explains the Commissioner's views in regards to when a supply may be directly connected to real property and states: 123. The inference is that if the connection between a supply and goods or real property is sufficiently close the supply is regarded as consumed where the goods or real property are located. 124. Consistent with the purpose of the subsection, we consider that the requirement that the supply is directly connected with goods or real property is a requirement that there be a very close connection between the supply and the goods or real property. Although your supply of services relates to a contractual dispute between the relevant parties and may be indirectly connected with land upon which the underlying project is situated, that indirect connection is insufficient to conclude that the supply is directly connected with real property situated in the indirect tax zone. Paragraph 33 of GSTR 2003/7 further provides that: 33. We consider that such a close link or association between the supply and particular goods or real property exists where, for example, the direct object of the supply is the goods or real property in the sense that: • the supply changes or affects the goods or real property in a physical way; or • there is a physical interaction with the goods or real property but without changing the goods or real property; or • the supply establishes the quantity, size, other physical attributes or the value of the goods or real property; or • the supply affects (or its purpose is to affect) or protects the nature or value (including indemnity against loss) of the goods or real property; or • the supply affects, or is proposed to affect, the ownership of the goods or real property including any interest in, or right in or over goods or real property. Based on the facts provided, your services relate to a dispute arising out of performance of an agreement between two commercial entities. Having regard to these facts, your services are not work physically performed on goods situated in the indirect tax zone when the work is done and are not directly connected with real property situated in the indirect tax zone. Accordingly, the supply satisfies paragraph (a) of Item 2. Your supply is therefore GST-free under Item 2. Although a supply may be GST-free because it satisfies an item in the table in subsection 38-190(1) of the GST Act, it may not be GST-free if one of the exclusions in subsections 38-190(2), 38-190(2A) and 38-190(3) of the GST Act applies. | Detailed Reasoning - Is the GST-free status of your supply negated by any of the provisions of the GST Act?: Subsection 38-190(2) applies only to supplies of rights, and subsection 38-190(2A) applies only to supplies that relate to Australian real property. Neither provision applies to your supply of services. Subsection 38-190(3) of the GST Act state: Without limiting subsection (2) or (2A), a supply covered by Item 2 in that table is not GST-free if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity in the indirect tax zone; and (c) for a supply other than an input taxed supply - none of the following applies: (i) the other entity would be an Australian-based business recipient of the supply, if the supply had been made to it; (ii) the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or (iii) the other entity is an individual who is provided with the supply as an employee or officer of the recipient, and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense. GSTR 2025/1 provides the policy behind subsection 38-190(3) of the GST Act. In summary, the rule that a non-resident must be outside Australia when the supply is performed reflects an assumption that the supply is consumed outside Australia and is therefore GST-free. | Detailed Reasoning - Paragraph 38-190(3)(a) - an agreement with a non-resident: Subsection 38-190(3) of the GST Act applies only if the supply is made under an agreement with a non-resident. The agreement may be written, oral or implied, and can be entered into either directly with the non-resident or indirectly through an intermediary, such as an agent or nominee acting on the non-resident's behalf. You agreed to provide services to the non-resident. The non-resident is a non-resident for Australian tax purposes and is not registered for GST. Accordingly, paragraph 38-190(3)(a) of the GST Act is satisfied. | Detailed Reasoning - Paragraph 38-190(3)(b) - the supply is provided to another entity in the indirect tax zone: Paragraph 38-190(3)(b) of the GST Act requires that the supply covered by Item 2 is provided, or required by the agreement to be provided, to another entity in the indirect tax zone. This involves a two-step test: first, whether the supply is provided (or required to be provided) to an entity other than the non-resident recipient; and second, whether that entity is in Australia in relation to the supply when the supply is performed. Another entity includes individuals, employees, partners or other entities distinct from the non-resident, but not merely agents arranging the supply. A supply may be made to a non-resident yet provided to another entity where the actual flow of the service or thing is to that entity. Additionally, a company or corporate limited partnership is in Australia if it is incorporated or formed in Australia respectively. Although the supply of your services is made under an agreement with the non-resident, being the recipient, the services are provided to the parties based in Australia. These parties are incorporated and carry on enterprises in the indirect tax zone and are registered for GST. While the non-resident contracts for and pays for the supply, you have provided your services to entities in Australia. Therefore, paragraph 38-190(3)(b) of the GST Act is satisfied as the services are required to be provided to the Australian resident entities in Australia. | Detailed Reasoning - Paragraph 38-190(3)(c) - preservation of GST-free status for certain supplies that are not input taxed supplies: The third condition that must be satisfied for subsection 38-190(3) of the GST Act to negate the GST-free status of a supply covered by Item 2 is outlined in paragraph 38-190(3)(c) of the GST Act. Where a supply covered by Item 2 (that is not an input taxed) is provided to another entity in the indirect tax zone, paragraph 38-190(3)(c) of the GST Act operates to preserve the GST-free treatment of the supply if one of the following conditions is satisfied: (i) the entity to which the supply is provided would have been an Australian-based business recipient had the supply been made directly to it; or (ii) the entity to which the supply is provided is an individual who receives the supply in their capacity as an employee or officer of an entity that would have been an Australian-based business recipient had the supply been made directly to it; or (iii) the entity to which the supply is provided is an individual who receives the supply in their capacity as an employee or officer of the recipient, and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense. An Australian-based business recipient is an entity that is GST-registered, carries on an enterprise in Australia, and acquires the supply for non-private or non-domestic purposes. Based on the facts provided, the parties in Australia, are registered for GST, and acquire the services in connection with the enterprises they carry on in Australia. Accordingly, had the supply been made directly to them, they would be Australian-based business recipients. As such, subparagraph 38-190(3)(c)(i) of the GST Act applies to preserve the GST-free treatment of the supply.

Relevant facts and circumstances: You have been appointed, along with other parties, to provide services to a non-resident entity. | The non-resident entity may replace you upon the request of all parties or at its own initiative where you are not fulfilling your functions. | The subject matter of the services involves a dispute concerning the proper construction and performance of a particular agreement. | The fees payable to you is fixed by the non-resident and are paid entirely by the non-resident. The recipient of your supply is the non-resident entity. However, you are required to provide your services to Australian based business entities. | You are registered for GST and provide services in the course of carrying on your business activities in Australia. | To the best of your knowledge, the non-resident does not have a branch in Australia. You dealt directly with the non-resident. | The non-resident is not registered for GST. | the recipient of your supply is a non-resident who is not in Australia when the thing supplied is done, and | either of the paragraphs in Item 2 is satisfied.