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Goods and Services Tax Determination

GSTD 2012/7A1 - Addendum

Goods and services tax: when are supplies of interconnection services made by an Australian resident telecommunication supplier GST-free under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999?

Addendum

This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953. It amends Goods and Services Tax Determination GSTD 2012/7 to reflect amendments made to the A New Tax System (Goods and Services Tax) Act 1999 by the Tax and Superannuation Laws Amendment (2016 Measures No.1) Act 2016 in relation to subsection 38-190(3) .

Schedule 2 of the Tax and Superannuation Laws Amendment (2016 Measures No.1) Act 2016 (generally about business to business supplies) applies from 1 October 2016.

These amendments ensure that intangible supplies that are made to non-residents not in Australia when the thing supplied is done, are not excluded from table item 2 in subsection 38-190(1) by subsection 38-190(3) when the supplies are provided to an Australian-based business recipient.

GSTD 2012/7 is amended as follows:

1. Paragraph 13

Omit the paragraph; substitute:

13. Under subsection 38-190(3) a supply covered by item 2 is not GST-free if:

•
it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident (paragraph 38-190(3)(a)); and
•
the supply is provided, or the agreement requires it to be provided, to another entity in Australia (paragraph 38-190(3)(b)); and

for a supply other than an input taxed supply, none of the following applies:

•
the other entity would be an Australian-based business recipient of the supply, if the supply had been made to the other entity;
•
the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or
•
the other entity is an individual who is provided with the supply as an employee or officer of the recipient and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense.

13A. Subsection 9-26(2) provides that an entity is an Australian based business recipient of a supply made to the entity if:

•
the entity is registered; and
•
an enterprise of the entity is carried on in Australia; and
•
the entity's acquisition of the thing supplied is not solely of a private or domestic nature.

13B. Subsections 69-5(3) and (3A) define an acquisition as a 'non-deductible expense' if:

•
it is not deductible under Division 8 of the Income Tax Assessment Act 1997 (ITAA 1997) because of provisions of the ITAA 1997 dealing with entertainment expenses and so on; or
•
to the extent it is not deductible under Division 8 of the ITAA 1997 because of provisions of the Income Tax Assessment Act 1936 dealing with meal entertainment or an entertainment facility.

2. Paragraph 19

Omit the last sentence; substitute: 'Where that subscriber is not an Australian based business recipient and is in Australia, the effect of subsection 38-190(3) is to 'negate' the operation of item 2 so that the supply is not GST free.'.

3. References

(a) Omit all subject references, including the heading.

(b) Under Legislative references, insert:

-
ANTS(GST)A 1999 38-190(3)(c).

This Addendum applies on and from 1 October 2016.

Commissioner of Taxation
6 March 2019

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

References

ATO references:
NO 1-8RUT866

ISSN: 2205-6254

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