ATO Interpretative Decision

ATO ID 2004/142 (Withdrawn)

Goods and Services

GST and a student taking home a cabinet made as part of an education course
FOI status: may be released

This ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decision

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, an education institution, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when, at the end of a cabinet making course, a student takes home the cabinet they made from materials the entity supplied as part of the course?

Decision

No, the entity is not making a taxable supply under section 9-5 of the GST Act when, at the end of a cabinet making course, a student takes home the cabinet they made from materials the entity supplied as part of the course. The entity is not making a supply, as the student owns the cabinet.

Facts

The entity is an education institution. The entity supplies a cabinet making course. This course is an education course as defined in section 195-1 of the GST Act and its supply is GST-free under section 38-85 of the GST Act.

The course is a practical course where a student learns to make a cabinet. As a part of the course, the entity provides the student with materials for making the cabinet. The supply of the materials is a supply of course materials as defined in section 195-1 of the GST Act and its supply is GST-free under section 38-95 of the GST Act.

The entity provides the course materials to the student for a fee. At the end of the course, the student takes home the cabinet they made during the course.

The entity is registered for good and services tax (GST).

Reasons for Decision

Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply. A transaction is only a taxable supply under section 9-5 of the GST Act if it also comes within the scope of the word 'supply' as discussed in section 9-10 of the GST Act.

Subsection 9-10(2) of the GST Act provides a non-exhaustive list of things that are considered to be a supply for GST purposes. Paragraph 9-10(2)(a) of the GST Act provides that a supply of goods is a supply under the GST Act.

The supply of a cabinet is a supply of goods. However, it needs to be determined whether the entity is making a supply.

The student makes the cabinet from the course materials. The entity supplies those course materials to the student for a fee. Therefore, the materials the student uses to make the cabinet are the student's materials. When the student takes home the cabinet at the end of the course, they are taking goods that they already own. Accordingly, the entity is not making a supply of the cabinet to the student.

Therefore, the entity is not making a taxable supply under section 9-5 of the GST Act when, at the end of a cabinet making course, a student takes home the cabinet they made from materials the entity supplied as part of the course.

Date of decision: 1 May 2003

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 9-10
   subsection 9-10(2)
   paragraph 9-10(2)(a)
   section 38-85
   section 38-95
   section 195-1

Keywords
Goods and services tax
GST free
GST education
Course materials
Education courses
GST supplies & acquisitions
GST supply
Taxable supply

Business Line: GST

Date of publication: 13 February 2004

ISSN: 1445-2782

history

	Date:	Version:
	1 May 2003	Original statement
You are here	23 December 2005	Archived

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