Question:
Question: GST - Exports
We are a GST registered company as is our customer. We provide positioning services to our customers.A particular customer claims that the services provided are used in Papua New Guinea instead of Australia. This company is a GST registered company in Australia. Is GST applicable or will it be considered as GST-free supplies?
Answer:
Recent changes are outlined below:
Under section 38-190 of the GST Act, a supply of services is GST-free if it is made to a non-resident who is not in Australia when the item is supplied, provided:
- 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
- The non resident acquires the thing in carrying on the non resident’s enterprise but is not registered or required to be registered.
If your customer is GST registered, it must be carrying on an enterprise in Australia and hence is not a non-resident and is likely to be in Australia when you do the work.
There is another GST exemption if you supply services to a customer:
- Who is not in Australia when the work is done; and
- The effective use or enjoyment of the services takes place overseas; provided
- The work was not on goods situated in Australia nor directly connected with Australian real property.
There is a third exemption where the services are directly connected with goods or land situated overseas. This exemption might be applicable depending on the work that you do.
It would seem that GST-free status may or may not be applicable in this case. Is this of any consequence? If your customer is GST registered it may be able to claim an input tax credit on GST paid for these services. Hence, it is not out of pocket.
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
