Subject:                                     FW: International GST [DLM=For-Official-Use-Only] [SEC=UNCLASSIFIED]


From: Warren Bolton []
Sent: Tuesday, 7 November 2017 9:07 AM
To: Purcell, Jonathan
Subject: RE: International GST [DLM=For-Official-Use-Only]


Hi Officer


I have now had an opportunity to review the information addressed in your references and I have a couple more enquiries if that is okay


  1. I note within the definition (Division 195 Dictionary) of the ANTS (GST) A 1999 there is a definition of ‘goods’

i.e. goods means any form of tangible personal property.


however, there is no definition of “services’ in this section.


Is ‘services’ defined elsewhere in the legislation?


  1. 1.227 of the Explanatory Memorandum cites a current system of collection of GST on physical good (as opposed to cyber) “at the border” for goods of a value > $1000.

Can you confirm that I have interpreted this correctly and that at present if you import a physical goods into Australia that GST is not payable on goods below $1000 in value?


3.       I seek some clarity in relation to section 9-25(5)(d).

a.      Firstly, Section 9-25 is headed ‘Supplies connected with the indirect tax zone’.

“indirect tax zone” means (with some minor modification) Australia.


Therefore, this Section is to do with an activity involving a ‘supply’ that involve the territorial area of ‘Australia’.


Can you confirm that this is correct?


b.       Further Subsection (5) is headed “Supplies of anything else “and starts with the statement “A supply of anything other than goods or *real property”……..


Why does “real property” not constitute a subset of “goods” as defined within the meaning of the term in Division 195?


Further by this statement therefore ,anything” is everything except ‘goods’ or ‘real property’.


BUT in the ‘Explanatory Memorandum’ under the Glossary of terms appears an ‘abbreviation’ titled ‘intangibles’ and the ‘definition’ is “things other than goods or real property


It appears that ‘anything’ and ‘intangibles’ the same entity, and if so why do we have two term that mean the same thing?


Paragraph (d) of Subsection (5) provides that an intangible is connected with Australia (indirect tax zone) if the recipient of the supply is an ‘Australian consumer’.


Australian consumer has the meaning given by subsection 9-25(7) and affected by section 84-100.


Subsection (7) provides an ‘Australian consumer’ is an ‘Australian resident’ (with some minor modification)


Section 84-100 defines the circumstances where an ‘entity’ is not an Australian resident.


Section 9-25(5)(d) by it plain reading does not address the question I asked (See Below). This section however advises that the supply of ‘anything’ is connected to Australia, merely  if the recipient is an ‘Australian citizen’.


It does not provide the head of power of legislative authority to make that Australian citizen responsible to pay GST.


That authority must be located somewhere else?


Finally, if this is the section that provides the head of power to charge an Australian citizen GST on ‘anything’ merely because of their citizenship status then this section as crafted is fatally flawed because as the ATO has advised (GSTR 2017/1) ‘… an Australian resident receiving a haircut from a hairdresser in Germany is not required to pay GST for this service’


Section 9-25(5)(d) cannot be the full explanation to my Question No 1!


4.      I have reviewed the Bill No.2016 supporting material ‘Explanatory Memorandum’ and Supplementary Explanatory Memorandum’  that passed through Parliament when the changes to the act were made. I have not been able to find in that document any reference to enforcement but I do understand that enforcement is a policy matter. I have therefore have taken the opportunity to review ATO’s advice in relation to enforcement and I have the following questions:

a.      Where in the legislation provides the Australian Taxation Office with the judicial power to enter a business premises in Vietnam; China; North Korea; or Russia for the purposes of inspecting records to determine whether or not businesses based in those countries, providing services or intangibles to Australian residents, have been collecting the required taxation?

b.      Can you please tell me the legal facility that the Australian Taxation Office possesses to require a non-Australian business located in any of the above countries to appear in an Australian court to answer the charge of acting in breach of Australian GST law?

c.       I see in your documentation that it is the intention of the Australian Taxation Office to trawl the Internet to determine who might be a non-Australian businesses providing goods and services to Australian residents that are the subject of the application of the GST. Does the Australian Taxation Office intend to use any other mechanism to try and locate non-Australian businesses that the Australian Taxation Office has determined are required to achieve compliance with Australian legislation or is the intention of the ATO to rely solely on voluntarily assistance of only major non-Australian businesses providing global services online?

d.      Does the Goods and Services Act make it an offence for a business to collect GST from an Australian citizen when there is no onus under the legislation to collect such tax. For Example: If a business charges a customer GST on vegetables ( a non GST item) and collect the GST from that customer is that business committing an offence?

e.      Can you please tell me the section of the act that would appear on any summons issued to a non-Australian businesses for a breach of Australian GST law for failing to collect GST on a supply of ‘anything’ to an Australian residents.

5.      One last question. If I determined to purchase American government bonds and have the documentation held in a secure safety deposit box within an American financial institution does the current Australian GST law require me to pay GST on the hire charges of that security box?

Thanks for your continued assistance.



Warren Bolton

04 293949 04