ATO Interpretative Decision

ATO ID 2002/971

Goods and Services Tax

GST and the supply of accommodation in a university residential college to non-students for periods of less than 28 days
FOI status: may be released

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Issue

Is the entity, a university, making an input taxed supply of residential premises under section 40-35 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days?

Decision

No, the entity is not making an input taxed supply under section 40-35 of the GST Act when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days.

The entity is making a supply of accommodation in commercial residential premises. The supply is a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a university. The entity is not a charitable institution or a gift-deductible entity.

The entity supplies hostel-style accommodation (consisting of board and lodging) in a university residential college to both students and non-students.

The entity supplies the non-student with accommodation in the residential college for a period of less than 28 days.

To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' (see ATO ID 2002/969).

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for Decision

Under section 40-35 of the GST Act:

•: a supply of residential premises (other than commercial residential premises), by way of lease, hire or licence, is input taxed to the extent that the premises are to be used predominantly for residential accommodation (paragraph 40-35(1)(a) of the GST Act).
•: a supply of premises is input taxed if it is commercial accommodation and Division 87 of the GST Act would apply but for the choice made by the supplier under section 87-25 of the GST Act (paragraph 40-35(1)(b) of the GST Act).

The entity supplies the non-student with accommodation in a university residential college. This supply is a supply of residential premises used predominantly for residential accommodation and is input taxed under section 40-35 of the GST Act unless the university residential college is 'commercial residential premises'.

To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' (see ATO ID 2002/969). As the entity is making the supply to a non-student, the premises are 'commercial residential premises'. Therefore, the supply is not input taxed under paragraph 40-35(1)(a) of the GST Act.

Division 87 of the GST Act only applies to accommodation provided for a continuous period of 28 days or more. As the entity is supplying the non-student with accommodation for a period of less than 28 days, Division 87 does not apply to the supply. Therefore, the supply cannot be input taxed under paragraph 40-35(1)(b) of the GST Act.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under any other provisions in Division 40 of the GST Act.

Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days.

[Note 1: Where the entity supplies a student with accommodation in a university residential college, the supply is an input taxed supply of residential premises under paragraph 40-35(1)(a) of the GST Act.]

Date of decision: 30 August 2002

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   Division 40
   section 40-35
   paragraph 40-35(1)(a)
   paragraph 40-35(1)(b)
   Division 87

Related ATO Interpretative Decisions
ATO ID 2002/969
ATO ID 2002/970

Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales.

Keywords
Goods and services tax
GST education
Student accommodation - tertiary
GST property & construction
GST commercial residential premises
GST long term accommodation
GST residential premises
GST residential rents
GST long term accommodation
GST residential premises

Siebel/TDMS Reference Number: 3351784

Business Line: Indirect Tax

Date of publication: 16 October 2002

ISSN: 1445-2782

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