Is possible to upgrade BC On-premise AU version to BC On-Cloud W1. What could be the approach if possible.
And there was a touch in your question I didn't notice at first. AU to W1. To do that, then you first need to go from On-Prem AU to On-Prem W1. Then from On-Prem W1 to Cloud W1, if that option is available in your region. As a general rule, then your BC tenant will be the "local" version according to the Azure Organization settings, you use when creating it. So you would need to check that with your partner.
As to going from AU to W1, then you would need to treat that as any other "upgrade". I'm not familiar with the actual differences between AU and W1, but you would need to remove any AU localized features in C/Side. But if any of your companies are in Australia, then they will very likely miss the functionality you just removed. Included anything GST.
Had you asked about going from DK to W1, then it would be much easier. With NAV 2018, Denmark was the first country where (almost) all localizations in C/Side were changed to Extensions (you find them on AppSource). So here I would be able to get me Danish tax-changes and other localization's, even in a W1 version. That's Microsoft's plan regarding all countries, and they have yet to announce when it will happen.
Thank you for your detail explanation! Understood we have to remove AU localized features in CSIDE and build a tenant based extension to transfer AU data, if really customer required AU localization data in W1 (may be some features).
Really glad to know Microsoft has plan for localization extension. Cheers!!