Non-resident shipping operator
GST agency rules allow the GST requirements (and fuel tax credit entitlements) of Australian transactions that non-resident businesses conduct through their resident shipping agent, to pass to that agent.
A non-resident shipping operator isn't entitled to fuel tax credits on duty-paid bunker fuel acquired or imported through their resident agent. Only the resident agent is entitled to the GST or fuel tax credits.
However, if the non-resident shipping operator acquires the bunker fuel directly, only they can claim fuel tax credits by lodging a business activity statement – they must be registered for both GST and fuel tax credits to do this.
GST agency rules don't apply to a non-resident shipping operator if they're a member of a GST group. In this case, the rules apply to the group's resident representative member.
Example: eligible to claim fuel tax credits
Thi Shipping Lines is a non-resident shipping operator that owns TSL Claudia Rose, a ship that's 350 gross tonnes.
Upon arriving in Brisbane, Polas Shipping Agency arranges for the entry of imported fuel bunkers and pays customs duty for TSL Claudia Rose, which they need to pay as they're under 400 gross tonnes. They also organise the purchase of bunker fuels to refuel the ship.
TSL Claudia Rose discharges all its international cargo in Brisbane whilst refuelling. It then carries out several domestic cargo voyages considered to be a long-term disconnection. It finally loads international cargo and departs for Auckland.
As the resident agent for a non-resident shipping operator, Polas Shipping Agency can claim the fuel tax credits on the fuel that Thi Shipping Lines acquired through them, including the remaining fuel in its bunkers when the ship departs Australia. As all the bunker fuel imported and acquired in Australia is eligible for fuel tax credits, there is no entitlement to a refund of duty on the ship's remaining fuel when its international voyage resumes.
End of exampleResident shipping agent
A resident shipping agent is a resident agent who provides shipping operators with a comprehensive package of supporting and complimentary goods and services, often including the provision of bunker fuel.
For a resident shipping agent to be entitled to claim fuel tax credits for the duty paid fuel, the fuel transaction must be conducted through them on behalf of a non-resident shipping operator. For more information relating to GST and agency relationships, see Agent, consignment and progressive transactions.
A resident shipping agent can't claim fuel tax credits for transactions conducted on behalf of resident shipping operators.
For more information, see our GST rulings:
- GSTR 2000/37 Goods and services tax: agency relationships and the application of the law
- GSTR 2003/15 Goods and services tax: importation of goods into Australia
Example: claiming fuel tax credits as a resident shipping agent
Barnard Shipping Agency arranges to acquire duty-paid bunker fuel for APL Arisva, a foreign ship owned by Schell Shipping Lines. Schell Shipping Lines is invoiced directly by the fuel supplier for the fuel.
Under the GST non-resident agency rules, Barnard Shipping Agency is exclusively entitled to claim fuel tax credits on the fuel that Schell Shipping Lines acquired through them.
Even though Schell Shipping Lines may have paid for the fuel, if Barnard Shipping Agency arranged for the acquisition then Barnard Shipping Agency is the only entity entitled to claim the fuel tax credits.
End of exampleCustoms broker
If a non-resident shipping operator makes a taxable importation of bunker fuel through a resident shipping agent, the agent is:
- entered as 'owner' on the customs entry
- liable to pay the GST and customs duty on the fuel (not the non-resident shipping operator)
- entitled to claim a GST credit and fuel tax credits for the fuel transactions.
A resident agent may include a licensed customs broker appointed by the non-resident shipping operator to enter the goods as an 'owner' on their behalf. In that case, a creditable importation is made through a customs broker in the capacity of resident agent.
Generally, a customs broker only facilitates the customs entry on behalf of the 'owner'. The customs broker is not shown as 'owner' on the customs entry. The customs broker prepares and lodges the customs entry on behalf of the non-resident shipping operator or their appointed shipping agent who is named as the owner on the entry. A creditable importation is not made through the customs broker.
Example: claiming fuel tax credits for non-resident operators
Reid Shipping Line, a non-resident shipping operator, engages Caitlin Shipping Agency to act on their behalf in Australia. Lacking in-house licensed customs brokers, Caitlin Shipping Agency engages Sapphire Customs Brokerage to prepare and lodge a customs entry on their behalf for fuel used by Reid Shipping Line to transport domestic cargo.
Under the non-resident agency rules, only Caitlin Shipping Agency is entitled to claim fuel tax credits on the deemed importation of bunker fuel used in Reid Shipping Line's domestic operations. Sapphire Customs Brokerage only facilitates the lodging of the relevant customs entry.
End of exampleFor more information, see GSTR 2003/15 Goods and services tax: importation of goods into Australia.
Resident shipping operator
Resident shipping operators must:
- be registered for GST if their turnover exceeds the GST turnover threshold
- account for all GST transactions and fuel tax credit claims on their own BAS, even if they conduct transactions through a resident agent.
If they're a member of a GST group, the GST agency rules apply to the group's resident representative member.
Fuel supplier
A fuel supplier:
- can't claim fuel tax credits for duty-paid bunker fuel that they on-sell (for example, if they source the fuel from a major fuel manufacturer and supply it directly to a non-resident shipping operator at a duty-free price) – this is because the on-selling of fuel to another entity isn't fuel used in an enterprise for fuel tax credit purposes
- can claim an excise refund for duty-paid bunker fuel supplied as ship's stores that is on-sold free of duty only if no other entity (such as the shipping operator they on-sell the fuel to) is entitled to claim the fuel tax credits.