GST and the supply of repair services to a non-resident

Is the entity, an Australian resident repairer of goods, making a GST-free supply under item 5 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it receives goods from a non-resident customer, repairs those goods in its workshop in Australia, and then returns those goods overseas to the non-resident customer?

Yes, the entity is making a GST-free supply under item 5 in the table in subsection 38-190(1) of the GST Act when it receives goods from a non-resident customer, repairs those goods in its workshop in Australia, and then returns those goods overseas to the non-resident customer.

The entity is an Australian resident repairer of goods. The entity supplies repair services from its workshop in Australia. The entity receives damaged goods from a non-resident customer that is located overseas. The entity repairs those goods in its workshop in Australia and then returns those goods to their customer overseas, via the post.

The non-resident customer is not registered or required to be registered for goods and services tax (GST). The entity is registered for GST.

Under section 38-190 of the GST Act, certain supplies of things other than goods or real property, for consumption outside of Australia, are GST-free. As a supply of repair services is not considered to be a supply of goods or real property, its GST status is appropriately considered under section 38-190 of the GST Act.

Item 5 in the table in subsection 38-190(1) of the GST Act (Item 5) provides that a supply is GST-free if it is a supply that is constituted by the repair, renovation, modification or treatment of goods from outside Australia whose destination is outside Australia.

The entity receives the damaged goods from its customer outside Australia, repairs those goods in its workshop in Australia, and then returns those goods to the customer overseas. Therefore, the supply meets the requirements outlined in Item 5.

Accordingly, the supply by the entity of the repair service is GST-free under Item 5 of the GST Act.