Issue
Is the entity, a supplier of goods and services that is registered for goods and services tax (GST), making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it makes a supply to a recipient that is not registered for GST?
Decision
Yes, the entity is making a taxable supply under section 9-5 of the GST Act when it makes a supply to a recipient that is not registered for GST.
Facts
The entity is a supplier of goods and services. The entity makes a supply to a recipient that is not registered for GST. The supplies are neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act.
The entity is registered for GST. The supply is for consideration. The supply is made in the course of the entity's enterprise and the supply is connected with Australia.
The recipient is not registered for GST.
Reasons for Decision
Under section 9-5 of the GST Act a supply is taxable if: • the supply is for consideration; • the supply is made in the course or furtherance of an enterprise; • the supply is connected with Australia; and • the entity is registered or required to be registered for GST.
The entity is making a supply for consideration, the supply is made in the course of the entity's enterprise, and the supply is connected with Australia. Additionally, the entity is registered for GST. Furthermore, the supply is neither GST-free under Division 38 of the GST Act, nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it makes a supply to an entity that is not registered for GST. [Note: In determining whether the entity is making a taxable supply under section 9-5 of the GST Act, the GST registration status of the recipient of the supply is not relevant.]