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.