GST and the export of goods by aircraft

Is the entity, a supplier of goods, considered to be the exporter of those goods for the purposes of items 1 and 2 [in the table in subsection 38-185(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) (Items 1 and 2)] when: • the entity delivers goods onto the tarmac and into the possession of an aircraft operator who has been engaged by the entity's customer, and • the aircraft operator transports the goods by air to a destination outside of Australia?

Yes, the entity is considered to be the exporter of the goods for the purposes of Items 1 and 2 as the part played by the entity in bringing about the removal of the goods from Australia is sufficient to justify the entity being described as the sender of those goods out of Australia.

The entity is a supplier of goods for both the domestic and export market.

The entity supplies goods to a customer. The goods are required to be sent to a destination outside Australia. Due to the size of the goods in question, the entity transports the goods by road to the airport where the goods are delivered on the tarmac directly into the control of an aircraft operator. The aircraft operator then physically transports those goods to the destination outside Australia. The aircraft operator has been engaged by the entity's customer.

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

Items 1 or 2 provide that the supply of goods that are exported from Australia is GST-free when certain requirements are satisfied. One of those requirements is that the supplier of the goods exports the goods from Australia.

Goods and Services Tax Ruling GSTR 2002/6 addresses the meaning of the term 'the supplier exports' in Items 1 and 2.

Paragraphs 106 to 108 of GSTR 2002/6 state: 106. The question of whether the supplier exports, that is, whether the supplier sends or takes goods from Australia, is answered by examining the role the supplier plays in bringing about the removal of the goods from Australia. 107. The supplier is the exporter for the purposes of item 1 or 2, if the part played by the supplier in bringing about the removal of the goods from Australia is sufficient to justify the supplier being described as the sender of those goods out of Australia. 108. The policy intent for requiring the supplier to export is to ensure that the goods are not used or consumed in Australia. If the supplier exports the goods, the supplier then knows that the goods are not consumed in Australia, and the goods can be supplied GST-free.

Paragraph 109 of GSTR 2002/6 provides that, in relation to transporting goods by air, the supplier can be described as the entity that exports the goods from Australia, if the supplier is responsible for delivering the goods to the operator of an aircraft who, or that, has been engaged by the customer to transport those goods to a destination outside Australia.

The entity has delivered the goods on the tarmac directly into the control of the aircraft operator. The aircraft operator has been engaged by the entity's customer to transport the goods to a destination outside Australia.

Therefore, the entity is considered to be the exporter of the goods under Items 1 and 2. Note: Where the goods are to be transported to a destination outside of Australia by air and a supplier is only responsible for delivery of the goods to a place in Australia and to a person in Australia who, or that, is not an aircraft operator, the supplier is not considered to be the exporter under Items 1 and 2, unless the requirements under subsection 38-185(3) of the GST Act are satisfied.