Issue
Is the supply of services performed by an entity on an island which is located outside the outer limit of the territorial sea surrounding mainland Australia, but which is part of the Commonwealth of Australia, connected with Australia under subsection 9-25(5) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Decision
Yes, the supply of services is connected with Australia under subsection 9-25(5) of the GST Act, as the services are performed in Australia.
Facts
The entity supplies services on an island which is located outside the outer limit of the territorial sea surrounding mainland Australia.
The island is part of an Australian State.
Provision is not made under any Act of Parliament for the island to be governed as a Territory.
Reasons for Decision
Subsection 9-25(5) of the GST Act sets out the circumstances in which a supply of a thing other than goods or real property is connected with Australia.
A supply of services will be connected with Australia under this provision if: • the services are performed in Australia; or • the supplier makes the supply through an enterprise that the supplier carries on in Australia.
Paragraph 17(a) of the Acts Interpretation Act 1901 (Acts Interpretation Act) provides that, in any Act, unless the contrary intention appears, the term 'Australia' means the Commonwealth of Australia and, when used in a geographical sense, includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands, but does not include any other external Territory.
A contrary intention appears in the GST Act, but only insofar as the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands and certain installations are concerned. Specifically, section 195-1 of the GST Act provides that, in that Act, the term 'Australia' does not include any external Territory, but does include an installation that is deemed by section 5C of the Customs Act 1901 to be part of Australia.
The island on which the entity performs the services is part of an Australian State and is thus part of the Commonwealth of Australia. It follows that the island will be part of Australia for the purposes of the GST Act unless it is an external Territory.
The term 'external Territory' is not defined in the GST Act. Paragraph 17(pd) of the Acts Interpretation Act provides that in any Act, unless the contrary intention appears, 'external Territory' means a Territory, not being an internal Territory, for the government of which as a Territory provision is made by any Act.
In this case, provision is not made under any Act of Parliament for the island to be governed as a Territory. Accordingly, the island is not an external Territory.
As the island is part of the Commonwealth of Australia and is not an external Territory, it is part of Australia for the purposes of the GST Act. Accordingly, the entity's supply of services is a supply that is performed in Australia. It follows that the entity's supply is connected with Australia under subsection 9-25(5) of the GST Act. Note - this ATO ID would, for example, apply to services performed by an entity on Macquarie Island.