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Edited version of private advice
Authorisation Number: 1052126811687
Date of advice: 6 June 2023
Ruling
Subject: GST - telecommunication supply made to non-resident company
Question
Will GST be payable on the telecommunications supply you will make to non-resident company X?
Answer
No. GST will not be payable as it will be a GST-free supply under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) on the basis that:
- you will make an intangible supply to a non-resident who is not in Australia; and
- the supply will not be a supply of work physically performed on goods situated in Australia when the work is done; and
- the supply will not be directly connected with real property situated in Australia; and
- no exclusions from the GST-free status of the supply (as set in subsection 38-190(2), 38-190(2A) or 38-190(3)) will apply.
You will be selling minutes of access to the Australian telephone network as a SIP trunk service. You will only provide the call minutes to company X who is the non-resident customer. Therefore, you will not be providing your supply to a third party who is in Australia. This is why the exclusion at subsection 38-190(3) of the GST Act will not apply.
Subsection 38-190(2) will not apply as your supply is not a supply of a right or option to acquire something, the supply of which would be connected with Australia and would not be GST-free.
Subsection 38-190(2A) will not apply as company X's acquisition of your supply does not relate to making a supply of real property located in Australia that would be input taxed.
This ruling applies for the following period:
06/06/2023 to 05/06/2027
The scheme commences on:
6 June 2023
Relevant facts and circumstances
You are registered for GST. You are trading under a certain trading name.
You acquire telecommunication service wholesale from another entity and resell it.
As a telecommunications provider (primary business), you provide the service that allows your clients to connect to the public telephone network using SIP Trunking so that they can make and receive phone calls. In most cases you sell this service by the second and charge GST. At a very small scale this is similar to a basic mobile telephone plan where you have call minutes included but is provided as an application over a computer network and not a device.
You will supply this service to company X, an overseas company based in an overseas country. Company X does not have any presence in Australia. Company X exports a gateway product internationally to countries including Australia.
You will provide company X with a number of SIP trunks to allow them to make telephone calls into Australia instead of calling in via an international carrier. Company X will be making calls to their customers in Australia for the purposes of promotion.
You will be selling minutes of access to the Australian telephone network as a SIP Trunk service to company X and you will only be providing the call minutes to company X.
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
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