GST and provision of services to develop a website located outside Australia to a recipient who is in Australia

Is the entity, a provider of website development services, making a GST-free supply under item 3 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it develops a website that is located outside Australia for a recipient who is in Australia at the time of the supply?

No, the entity is not making a GST-free supply under item 3 in the table in subsection 38-190(1) of the GST Act when it develops a website that is located outside Australia for a recipient who is in Australia at the time of the supply.

The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a provider of website development services. The entity develops a website that is located outside of Australia for a recipient who is in Australia at the time of the supply.

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

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

Item 3 in the table in subsection 38-190(1) of the GST Act (Item 3) provides that supplies of things used or enjoyed outside Australia are GST-free when certain requirements are met. The first requirement of Item 3 is that the supply is made to a recipient who is not in Australia when the thing supplied is done.

Although the entity develops a website that is located outside of Australia, the recipient is in Australia at the time of the supply. As the recipient is in Australia at the time of the supply, the entity's supply of website development services does not satisfy Item 3. Therefore, the entity is not making a GST-free supply under Item 3.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under any other provision in 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 develops a website that is located outside of Australia for a recipient who is in Australia at the time of the supply.