Q: One client is looking into purchasing a boat for personal use. Here are the details:

• An Australian resident is purchasing an Australian boat that is registered in Australia from an Australian resident owner;
• The money is transferred from one Australian bank account to another Australian bank account;
• The boat was previously imported into Australia in late 1990s. All import fees and taxes were paid at the time.
• It was for many years in Australia and then taken overseas by the selling owner. It has been overseas for three years.
• Due to health reasons, the owner wants to sell the boat overseas as his condition prohibits him to return the boat to Australia
• The purchaser wants to buy the boat and bring it back to Australia
• Both parties are not registered for GST or required to be registered.
• The boat is for personal use only. No modifications have been made to the boat.

Is GST payable when the new owner returns the boat to Australia?

A: As the situation above, it appears that the reimportation of this vessel would be treated as a taxable importation under s 13-5 of the GST Act and hence attract GST. The exemption in s 42-10(2) would not apply in this case. The subsection provides that the reimportation of goods acquired prior to July 1, 2000 is a non-taxable importation where all the following conditions are met:

• The importer manufactured, acquired or imported the goods prior to July 1, 2000
• The ownership of the goods has not changed
• The goods have been exported and then imported without alteration, and
• The importer did not and was not entitled to claim a refund under the tourist refund scheme when the goods were exported.

Since ownership of the goods has changed in this case, the exemption would not apply.