Treasury Laws Amendment (GST Low Value Goods) Act 2017 (77 of 2017)

Schedule 1 Extending GST to low value imported goods

A New Tax System (Goods and Services Tax) Act 1999

38 After Subdivision 84-B

Insert:

Subdivision 84-C - Offshore supplies of low value goods

84-73 What this Subdivision is about

Supplies of low value goods involving goods being brought to the indirect tax zone may be connected with the indirect tax zone.

An entity may be treated as the supplier of an offshore supply of low value goods, if the entity is the operator of an electronic distribution platform through which the supply is made, or the entity is a redeliverer of the goods.

The result is that the operator or redeliverer, instead of the supplier, counts the supplies towards its GST turnover and pays GST on the supplies.

Suppliers of offshore supplies of low value goods are not required to issue tax invoices and adjustment notes, but they must ensure relevant information is included in customs documents.

Note 1: The supplies will need to meet other requirements in order to be taxable supplies: see section 9-5.

Note 2: Offshore supplies of low value goods that are not connected with the indirect tax zone under this Subdivision may be taxable supplies, and "reverse-charged", under Subdivision 84-A.

84-75 Supplies of low value goods that are connected with the indirect tax zone

(1) An *offshore supply of low value goods is connected with the indirect tax zone if the *recipient of the supply is a *consumer of the supply.

Note: There is an exception to this rule if the supplier reasonably believes there will be a taxable importation of the goods: see section 84-83.

(2) An entity is a consumer of a supply made to the entity if:

(a) the entity is not *registered; or

(b) if the entity is registered - the entity does not acquire the thing supplied solely or partly for the purpose of an *enterprise that the entity *carries on in the indirect tax zone.

Note: A supplier may treat a recipient as not being a consumer if the supplier reasonably believes (based on certain information) that to be the case: see section 84-105.

(3) This section has effect in addition to section 9-25 (which is about when supplies are connected with the indirect tax zone).

84-77 Meaning of offshore supply of low value goods

Supplies of low value goods delivered etc. into the indirect tax zone by suppliers

(1) A *supply of low value goods is an offshore supply of low value goods if:

(a) the supply involves the goods being brought to the indirect tax zone; and

(b) the supplier delivers the goods into the indirect tax zone, or procures, arranges or facilitates the delivery of the goods into the indirect tax zone.

Supplies of low value goods made through an electronic distribution platform

(2) Without limiting subsection (1), a *supply of low value goods is an offshore supply of low value goods if:

(a) the supply involves the goods being brought to the indirect tax zone; and

(b) the supply is made through an *electronic distribution platform; and

(c) the operator of the platform delivers the goods into the indirect tax zone, or procures, arranges or facilitates the delivery of the goods into the indirect tax zone.

Supplies of low value goods delivered etc. into the indirect tax zone by redeliverers

(3) A *supply of low value goods is an offshore supply of low value goods if:

(a) the supply involves the goods being delivered to a place outside the indirect tax zone; and

(b) a *redeliverer delivers the goods into the indirect tax zone, or procures, arranges or facilitates the delivery of the goods into the indirect tax zone.

(4) An entity is a redeliverer in relation to a *supply of low value goods if, as a result of an arrangement with the *recipient of the supply (or another entity acting on the recipient's behalf), the entity, in the course of *carrying on an enterprise:

(a) delivers the goods into the indirect tax zone, or procures, arranges or facilitates the delivery of the goods into the indirect tax zone; and

(b) does one or more of the following:

(i) provides use of an address outside the indirect tax zone to which the goods are delivered;

(ii) procures, arranges or facilitates use of an address outside the indirect tax zone to which the goods are delivered;

(iii) purchases the goods;

(iv) procures, arranges or facilitates purchase of the goods.

(5) Disregard section 84-81 in applying this section.

84-79 Meaning of supply of low value goods

(1) A supply of goods is a supply of low value goods if:

(a) the goods supplied are covered by subsection (3); or

(b) the goods supplied include goods covered by subsection (3).

(2) However, if the goods supplied include goods that are not covered by subsection (3), then the supply of goods (the actual supply ) is to be treated as if it were 2 separate supplies in the following way:

(a) the part of the actual supply consisting of goods covered by subsection (3) is to be treated as if it were a separate supply that is a supply of low value goods (regardless of the total *customs value of the goods to which those supplies relate); and

(b) the remainder of the actual supply is to be treated as if it were a separate supply that is not a supply of low value goods .

Low value goods

(3) This subsection covers goods if:

(a) the *customs value of the goods is $1,000 or less; and

(b) the goods are not tobacco, tobacco products or alcoholic beverages.

(4) Work out the *customs value of goods for the purposes of this section at the time when the *consideration for the supply was first agreed, and as if:

(a) the goods were exported from the country from which they were brought to the indirect tax zone; and

(b) the goods were imported into Australia; and

(d) to the extent that working out the value involves an assumption about the way in which the Collector (within the meaning of the Customs Act 1901) will exercise a discretion - the Collector exercised that discretion in a reasonable manner in accordance with law; and

(e) if an amount to be taken into account in working out that value is not an amount in Australian currency, the amount so taken into account is the equivalent in Australian currency of that amount, ascertained in any of the following ways:

(i) in the way provided in section 161J of the Customs Act 1901;

(ii) in the manner determined by the Commissioner under subsection (5) of this section.

(5) The Commissioner may, by legislative instrument, determine a manner of ascertaining an amount in Australian currency for the purposes of paragraph (4)(e).

(6) Disregard section 84-81 in applying this section.

84-81 Who makes an offshore supply of low value goods

(1) This section does not apply to a supply to the extent it is *connected with the indirect tax zone because of a provision of this Act other than this Subdivision.

(2) This section applies in relation to an *offshore supply of low value goods, regardless of whether the *recipient of the supply is a *consumer.

Note: If the recipient is not a consumer, the entity treated as a supplier by this section must still ensure information is included in customs documents: see section 84-91.

Operator of electronic distribution platform - extension of section 84-55

(3) Section 84-55 applies to a supply as if it were an *inbound intangible consumer supply if:

(a) the supply is made through an *electronic distribution platform; and

(b) the supply is an *offshore supply of low value goods.

Note: Section 84-55 treats the operator of an electronic distribution platform as the supplier of supplies made through the platform.

Redeliverer

(4) If a supply of goods is an *offshore supply of low value goods solely because of subsection 84-77(3), the *redeliverer is taken, for the purposes of this Act:

(a) as being the supplier of, and as making, the supply; and

(b) as having made the supply for the *consideration for which it was made; and

(5) Despite subsection (4), if there is more than one *redeliverer in relation to the supply, that subsection only applies to the redeliverer who is:

(a) the first of the redeliverers to enter into an arrangement, with the *recipient, relating to the supply; or

(b) if paragraph (a) does not apply - the first of the redeliverers to enter into an arrangement, with an *associate of the recipient, relating to the supply; or

(c) if paragraphs (a) and (b) do not apply - the first of the redeliverers to enter into an arrangement, of a kind referred to in subsection 84-77(4), relating to the supply; or

(d) if paragraphs (a), (b) and (c) do not apply - the redeliverer determined in accordance with an instrument made under subsection (6).

(6) The Commissioner may, by legislative instrument, make a determination specifying how a *redeliverer of *offshore supplies of low value goods is to be determined for the purposes of paragraph (5)(d).

(7) Division 57 (resident agents acting for non-residents) does not apply in relation to a supply to which subsection (4) applies.

84-83 Exception - when supplier reasonably believes there will be a taxable importation

(1) This section does not apply to a supply to the extent it is *connected with the indirect tax zone because of a provision of this Act other than this Subdivision.

(2) An *offshore supply of low value goods is not connected with the indirect tax zone to the extent that:

(a) the supplier takes reasonable steps to obtain information about whether or not the goods would be imported into the indirect tax zone as a *taxable importation; and

(b) after taking those steps, the supplier reasonably believed that the goods would be imported into the indirect tax zone as a taxable importation.

(3) Without limiting subsection (2), paragraph (2)(a) is taken to be satisfied if the supplier's usual business systems and processes provide the supplier with a reasonable basis for forming a reasonable belief about whether or not goods to be imported into the indirect tax zone would be imported as a *taxable importation.

(4) For the purposes of paragraph (2)(b), the time at which the supplier must have the reasonable belief is:

(a) if subsection 84-81(4) (about redeliverers treated as suppliers) does not apply - at the most recent time before export that the *consideration for the supply was agreed; or

(b) if subsection 84-81(4) applies - at the time of delivering the goods into the indirect tax zone, or procuring, arranging or facilitating the delivery of the goods into the indirect tax zone.

(5) This section has effect despite section 84-75.

84-85 Exception - when there is also a taxable importation

(1) Subsection (2) applies to an *offshore supply of low value goods you made to the extent that:

(a) the supply is, apart from this section, a *supplier-taxed offshore supply of low value goods; and

(b) an importation of the goods was a *taxable importation.

Note: This section applies if section 42-15 has not applied to treat the importation as a non-taxable importation.

(2) The supply is treated as if it were not a *taxable supply if:

(a) to the extent (if any) that you have *passed on the GST on the supply to another entity - you reimburse the other entity for the passed on GST; and

(b) an entity provides to you a declaration or information that indicates that GST has been paid on the *taxable importation.

(3) A supply of goods is a supplier-taxed offshore supply of low value goods if the supply is:

(a) an *offshore supply of low value goods; and

(b) a taxable supply solely under section 9-5; and

84-87 No tax invoices or adjustment notes for offshore supplies of low value goods

(1) You are not required to issue a *tax invoice for a *taxable supply that you make if the supply is a *supplier-taxed offshore supply of low value goods.

(2) You are not required to issue an *adjustment note for an *adjustment event relating to a *taxable supply that you make if the supply is a *supplier-taxed offshore supply of low value goods.

(3) This section has effect despite sections 29-70 and 29-75 (which are about tax invoices and adjustment notes).

84-89 Notifying amounts of GST to recipients of offshore supplies of low value goods

(1) You must give the *recipient of a supply a notice of the amount of GST (if any) payable in relation to the supply if the supply is a *supplier-taxed offshore supply of low value goods.

(2) You must give the notice in the *approved form, and at the time the *consideration for the supply is first agreed.

(3) If:

(a) you make a *supplier-taxed offshore supply of low value goods; and

(b) you did not give a notice under subsection (1); and

(c) the *recipient of the supply requests you to notify the recipient of the amount of GST (if any) payable in relation to the supply;

you must, within 5 *business days after the request is made, give the recipient a notice of that amount in the *approved form.

Note: If you do not give the notice as required by this subsection, you are liable to an administrative penalty under subsection 288-45(2A) in Schedule 1 to the Taxation Administration Act 1953.

84-91 The amount of GST on offshore supplies of low value goods made by redeliverers

(1) If a *supplier-taxed offshore supply of low value goods is an *offshore supply of low value goods solely because of subsection 84-77(3), the amount of GST on the supply is 10% of the *price of the supply.

(2) This section has effect despite section 9-70 (which is about the amount of GST on taxable supplies).

Note: Section 9-90 (rounding of amounts of GST) can apply to amounts of GST worked out using this section.

84-93 Suppliers of offshore supplies of low value goods to ensure tax information is included in customs documents

(1) If:

(a) you make an *offshore supply of low value goods; and

(b) you are *registered, or *required to be registered;

you must ensure that the information set out in subsection (2) is included in one or more of the documents referred to in subsection (3) (regardless of whether or not the supply is *connected with the indirect tax zone).

Note: If you do not ensure the information is included, you are liable to an administrative penalty under section 288-46 in Schedule 1 to the Taxation Administration Act 1953.

(2) For the purposes of subsection (1), the information is as follows:

(a) your registration number;

(b) if the *recipient's *ABN has been disclosed to you - that ABN;

(3) For the purposes of subsection (1), the documents are as follows:

(a) an import declaration (within the meaning of the Customs Act 1901);

(b) an import declaration advice (within the meaning of that Act);

(d) a self-assessed clearance declaration advice (within the meaning of that Act);

(e) a document of a kind specified in an instrument made under subsection (4).

(4) The Commissioner may, by legislative instrument, make a determination specifying kinds of documents for the purposes of paragraph (3)(e).

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