Part 6 - Second hand goods
Issue 1: How will second hand goods that are donated to a charity be treated under GST?
Non-interpretative – straight application of the law
The donated second-hand goods rules provide that a supply of second hand goods is GST-free if:
- the organisation that is supplying the second hand goods is an endorsed charity, a gift-deductible entity (GDE) or a government school, and
- the goods were a gift to the organisation or were supplied by another GDE, endorsed charity or government school to which the goods were also donated.
However, the supply is not GST-free if the endorsed charity, GDE or government school has dealt with the goods in such a way that the goods no longer have their original character.