Commissioner publishes gst ruling on supplies of goods connected with the indirect tax zone all about gst in australia american university application

Yesterday the commissioner published GSTR 2018/2 ‘goods and services tax: supplies of goods connected with the indirect tax zone’. The ruling outlines the commissioner’s views on when supplies of goods are connected with australia under s 9-25(1), (2) and 3 of the GST act.

The ruling is the second of a suite of rulings that are to replace GSTR 2000/31 ‘goods and services tax: supplies connected with australia’. The first ruling was GSTR 2018/1 ‘goods and services tax: supplies of real property connected with the indirect tax zone (australia)‘ which outlines the commissioner’s views on when a supply of real property is connected with the indirect tax zone under s 9-25(4) of the GST act. Top 50 universities in the world my post on that ruling can be accessed here. Washington university school of law I understand that a third ruling will follow that addresses the supply of “anything else” under s 9-25(5) – which includes intangible property and services.

The provisions involve a number of “connection tests”, which connect supplies of goods to australia. Various “disconnection tests” in s 9-26 may then apply to remove that connection, which removes the transaction from the GST net. Also, some supplies of goods will remain connected with australia but will be GST-free – such as exports.

A broad test is applied to determine whether supplies of goods are connected with australia. The place the supplier or recipient carries on business is not relevant to this test (although it may be relevant to the disconnection test discussed below) – rather, the focus is on the three following circumstances:

This test applies if the goods are physically delivered or made available for collection in australia. Washington university colors this can occur where the supplier delivers the goods from a place in australia to the recipient’s nominated place in australia. Or alternatively where the supplier has the goods imported into australia, shipped to themselves, and then delivered or made available to the recipient in australia.

A supply of goods is connected with australia if the supply involves the goods being brought to australia and the supplier imports the goods into australia. This may involve both a taxable supply under s 9-5 and a taxable importation under s 13-15 – however, if the supplier makes a creditable importation the supplier will be entitled to an input tax credit for the importation.

If the supply of goods involves the goods being brought into australia and the supplier installs or assembles the goods in australia (for example, a large piece of mining equipment), the supply is treated as the supply goods and a separate supply of the installation. However, where the supplier is a non-resident the services component may be disconnected under item 1 of the table under s 9-26.

The ruling observes that ordinarily, a supply of goods that is delivered or made in australia is connected with australia – even where the supply is between two non-residents, neither of which makes the supply or acquisition in the course of an enterprise carried on in australia.

This exemption applies to a supply of goods subject to a lease involving a transfer of ownership from one non-resident lessor to a new non-resident lessor where: the supplier does not make the supply through an enterprise they carry on in australia, the recipient does not acquire the goods to any extent for the purpose, and the goods will continue to be leased on substantially similar terms.

This exemption applies to new lease arrangements entered into between the non-resident that acquired the goods and the entity that continued to lease the goods. The lease must be on substantially similar terms or conditions. Washington university university college the ruling accepts that the terms need not be identical, some variations are permissible.