Goods and Services Tax

Introduction

A Goods and Services Tax (GST) was introduced on 1 July 2000 as a 10% broad range indirect tax that replaced wholesale sales tax. GST is a tax on final consumption which affects all consumers and enterprises. The definition of 'enterprise' for GST purposes includes the University.

The University as a registered enterprise is required to pay the Australian Taxation Office (ATO) 1/11 of all considerations received (cash or kind) for providing any taxable supply in the furtherance of the enterprise unless that supply is GST Free or Input Taxed.

Supplies and GST

There are three different types of supply for GST purposes:

  • Taxable supply
  • GST-free supply
  • Input taxed supply

Taxable Supplies

A taxable supply arises when all of the five components listed below are present:

  • There is a supply
  • It is made for consideration
  • In the course or furtherance of an enterprise
  • It is connected with Australia
  • The supplier is registered

The following is a brief summary of taxable supplies:

  • Sale, lease or hire of goods related to an education course (except consumable course materials)
  • Non-basic food and accommodation as part of excursion or field trip
  • Private tutors (GST not payable if tutor not registered for GST)
  • Text books, stationery, computer discs
  • Conferences and seminar fees including faculty hire and booking fees
  • Importation of goods – customs value and duty payable
  • Second hand goods – buying from a person registered for GST or where you purchase from a second hand dealer
  • Hire of sporting facilities

GST-Free Supplies

A supply is GST-free if it is deemed to be GST-free in accordance with Division 38 of the GST Act. GST is not charged to the recipient, but credits can still be claimed for tax paid on the inputs used to produce the GST-free supply.

The following is a brief summary of supplies that are GST-free:

  • Education courses (including Masters and Doctoral)
  • Administration services related to GST-free courses
  • Curriculum related activities including excursions or field trips
  • Course materials including photocopying and workshop materials
  • Donations and bequests
  • Sponsorship – does not result in a material benefit to the external party
  • Scholarships – treated as a donation only if no material benefit passes back to the donor
  • Fund raising activities – if the supplier are non-commercial
  • Exports (for use outside Australia)
  • Student accommodation less than 75% of market value
  • Medical and health

Input Taxed Supplies

Input taxed supplies are not subject to GST. Unlike GST-free supplies no input tax credits can be claimed for anything acquired or imported to produce such supplies.

The following is a brief summary of supplies that are Input taxed supplies:

  • Financial supplies which include lending or borrowing money
  • Residential rent at market price