GST and investigation services directly connected with goods situated outside Australia

Is the entity, an Australian resident, making a GST-free supply under item 1 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies investigation services to another Australian resident and the services are directly connected with goods situated outside Australia?

Yes, the entity is making a GST-free supply under item 1 in the table in subsection 38-190(1) of the GST Act when it supplies investigation services to another Australian resident and the services are directly connected with goods situated outside Australia.

The entity is an Australian resident. The entity supplies investigation services to another Australian resident. The services are carried out overseas and include conducting an investigation into machinery, repossessing the machinery and bringing it back to Australia.

The entity is registered for goods and services tax (GST).

Subsection 38-190(1) of the GST Act makes certain supplies of things other than goods or real property, for consumption outside Australia GST-free. The supply of the investigation services is a supply of a thing other than goods or real property. Therefore, it is appropriate to consider the GST status of this supply under subsection 38-190(1) of the GST Act.

Item 1 in the table in subsection 38-190(1) of the GST Act (Item 1) provides that a supply of things other than goods or real property that is directly connected with goods or real property situated outside Australia is GST-free.

In this case, the services performed overseas involve conducting an investigation relating to machinery, repossessing it and bringing it back to Australia. These services are considered to be services directly connected with goods situated outside Australia. Therefore, the supply by the entity meets the requirement in Item 1.

As such, the entity is making a GST-free supply under Item 1 when it supplies investigation services to another Australian resident and the services are directly connected with goods situated outside Australia.