On 19 September 2018, the ATO issued GST Ruling GSTR 2018/2 – setting out the ATO’s view on when supplies of goods are ‘connected with Australia’, and therefore potentially subject to GST. This new ruling updates and replaces GSTR 2000/31 (supplies connected with Australia). The new ruling applies from the date of issue. It sets out the ATO’s view of the meaning of a supply of goods:
- Wholly within Australia (Subsection 9-25(1) of the GST Act)
- From Australia (9-25(2)), and
- To Australia (9-25(3)).
These provisions are essentially “connection tests” which connect goods to Australia for the purposes of GST. However, various “disconnection tests” may then apply which result in the supply falling outside the GST net.
To be clear, this new ATO ruling only applies to goods, which is defined as tangible property that has a physical existence. Therefore, it does not include intangible personal property such as intellectual property (for example, a copyright), and nor does it include land or an interest in land. Although the supply of goods is most commonly by way of a sale, supplies can also include a lease or hire of goods.
To view the ATO GST Ruling, click here.