GOODS AND SERVICES TAX (GST) Section : 3.0. GST APPLICABILITY TO UNIVERSITY TRANSACTIONS Part : 3.5

Taxation Manual GOODS AND SERVICES TAX (GST) Section : 3.0 GST APPLICABILITY TO UNIVERSITY TRANSACTIONS Part : 3.5 Revised Date : 24.07.2005 ...
Author: Clifton Spencer
4 downloads 0 Views 141KB Size
Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

The University enters many transactions that have GST implications. The GST treatment of the following University outputs is described under the corresponding section numbers. 7.1

Education

7.18

Field Trips

7.2

Student Administration

7.19

Printing, Publications and the Press

7.3

Course Materials

7.20

Facilities Management

7.4

Bookshop

7.21

Venues

7.5

Grants and Appropriations

7.22

Properties

7.6

Research

7.23

Exports

7.7

Sponsorships & Scholarships

7.24

Imports

7.8

Donations

7.25

Staff Expenses

7.9

Fund Raising

7.26

Sports Centre

7.10

Parking

7.27

Insurance

7.11

Fines

7.28

Conferencing

7.12

Library/Information Services

7.29

Theatres

7.13

Consulting

7.30

Child Care Facilities

7.14

Health

7.31

Bonds and Security Deposits

7.15

On-charging Salaries

7.32

Sales of Second Hand Equipment

7.16

Salary deductions

7.33

Tea Funds

7.17

Accommodation

41

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.1

Education

Generally education provided by the University is GST free. Education is specifically defined in the legislation and includes the following courses under S195-1 of the GST Act: • • • • • • • • •

Tertiary courses; Masters or Doctoral courses; Adult and community education courses; English language courses for overseas students; First aid or life saving courses; Tertiary residential college courses; Professional or Trade courses; Other GST free courses including first aid or life saving course and tertiary residential college courses; and Units that have been ‘audited’

Tertiary course For a course to qualify as a tertiary course for GST purposes, and thereby be GST-free, the course must be a course of study or instruction that is a tertiary course determined by the Education Minister under subsection 5D(1) of the Student Assistance Act 1973, or any other course of study or instruction that the Education Minister has determined is a tertiary course for the purpose of the Act. An education course that is an ‘approved tertiary course’, will be GST-free regardless of whether the student is: • •

An Australian resident or overseas full fee paying student; or A part time or full time student.

However, a course provided under contract specifically designed for non-resident students, and not available to resident students, is not an ‘approved tertiary course’ under the Education Minister’s Determination GSTR 2001/1. Masters or Doctoral course (Award course) A course of study or instruction supplied by the University (as a higher education institution) and accredited at Masters or Doctoral level is GST free.

42

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

GST free fees: • •

Commonwealth Supported fees; Course fees paid by students enrolled in a single unit of an award course (i.e. approved tertiary course).

Adult and community education course For a course supplied by the University to be a GST free adult and community education course, the following requirements must be satisfied: • • • • •

The course must be a course of study or instruction that is likely to add to the employment related skills of people undertaking the course; and The course must be of a kind determined by the Education Minister to be an adult and community education course (See Student Assistance Act ACE determination 2000) The course cannot be any other education course (i.e. tertiary course); and The course must be available to adults in the general community; and The course cannot be provided by, or at the request of an employer for its employees or by, or at the request of an organisation for its members, and cannot be a course provided by way of private tuition to an individual.

Employment related skills It is important to note that the Education Minister is not responsible for determining whether an adult and community education course is likely to add to the employment related skills of people undertaking the course. This criterion is separate from the Minister’s Determination, and will depend on the facts of each case. A course satisfies the test to whether an adult and community education course is likely to add to the employment related skills of people undertaking the course if the course meets the following requirements: • • • •

It is directed at people who want to add to their employment related skills; and The objectives of the course specify the employment related skills that participants will acquire in undertaking the course; and The means of imparting the skills to the participants are clearly identified prior to the commencement of the course; and There is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours.

43

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Adult and Community Courses that are GST free include: • •

“Computer courses” designed to increase and improve computer skills of students; and “Job Seeking Course” designed to assist participants to market their skills.

Adult and Community Courses that are taxable supplies would include: • • •

Belly Dancing courses; Cooking classes; or Picture Framing courses.

For more details see Australian Taxation Office (ATO) ruling on ACE courses (GSTR 2000/27) and ATO Interpretative Decision ID2003/776. English language course for overseas students A Course of study or education supplied by the University to overseas students that includes study or education in the English language is GST free, as long as the students enter Australia on a student visa. An overseas student (as per ATO Interpretative Decision ATO ID 2004/853) is a student who is part of the overseas student program and is in possession of the relevant student visa, being the DIMIA visa classes 570-576. An overseas student, for the purposes of an English language course for overseas students, does not include an individual who is in Australia on a tourist visa, working holiday or other type of visa who decides to undertake some type of study or education. GST is charged on placement fees. These include placement fees for homestay and accommodation. Transactions out of the scope of GST include those outputs where the University is merely acting as an agent collecting money from the students and handing it over to the service provider. The amounts collected are not treated as revenue and the payments are not treated as costs. Receipts and payments are merely passed through a clearing account. These transactions include: • •

Private Health Insurance fees collected on behalf of the provider; Accommodation fees collected on behalf of homestays/colleges/hostels.

44

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Professional or trade course A course is GST free if it leads to a qualification that is an essential prerequisite. To be an “essential prerequisite” under S195(1) of the GST Act, it must: • • •

Be imposed under an industrial instrument; or Imposed by the relevant profession or trade association; or If these don’t apply, a profession or trade association that has requirements relating to the entry or commencement of the course.

The qualification must be for: • •

entry to a particular profession or trade in Australia; or to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.

Therefore continuing professional development courses are not GST free (see Taxable courses below). For more details on Professional or Trade Courses, refer to GSTR2003/1 – GST: Supplies that are GST-free as Professional and Trade Courses.

Other GST free courses Under the GST Legislation, the Education Minister may determine other courses supplied by the University to be a GST free tertiary course. Under the Ministers Determination of the Student Assistance Act (SAA) 1973 – Determination 2002/1, a GST-free tertiary course includes: • • • • • •

Preparatory courses for tertiary education (see Alternative entry below); An accredited higher education course or accredited vocational education and training under RATE or AQF guidelines (excluding Masters and Doctoral degrees); An associate degree course for which the completion of Year 12 or a higher education course is the normal entry requirement; Combined courses including double bachelor degrees and combined bachelor degree / postgraduate diploma courses; Graduate degree courses; and Masters qualifying courses.

Where one unit of a tertiary course (eligible) is supplied by the University and the student is enrolled in that unit, the unit is GST free. When a student enrols in a unit and elects not to be assessed (often referred to as ‘auditing’ a unit), provided the student is enrolled in a unit that forms part of an approved tertiary course, it is also GST free.

45

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Alternative entry programs In relation to alternative entry programs, while these may fall within the definition of a “preparatory course for tertiary education”, they will not be GST free where they are contractually provided to students by a controlled entity rather than the University directly (and are not therefore provided by a higher education institution). They may be GST-free, however, if the relevant controlled entity is a non-government Registered Training Organisation. Options program-TAFE articulation is GST free where the student can enrol via either: • •

TAFE enrolment in a specific TAFE course, and credit is given by the University on a one on one basis for courses satisfactorily completed. University enrolment but the actual course work is done in a TAFE college and credit is given on a one for one basis for courses satisfactorily completed.

Extension Studies and Study Abroad It is understood that courses in these areas are really units of otherwise GST Free tertiary award courses, the difference being that the students are not enrolled as such in the ‘entire’ award course for a variety of reasons. The students therefore undertake isolated units that are within otherwise GST Free tertiary award courses. Units under these areas will be GST Free if the units are from units that are within otherwise GST free courses. Assessment and Issue of Prior qualifications Fees charged by the University (eg Pathways course) are GST free for the assessment and issue of qualifications to allow: • • • •

Access to education; Access to employment; Access to membership to a professional or trade association; or Registering or licensing for a particular occupation.

Mooting income may be subject to GST and each case should be considered individually. Where law firms sponsor mock courts in exchange for naming rights the income is likely to be subject to GST (see sponsorships).

46

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Taxable Courses Courses not classed as education in the legislation are subject to GST and include: • •

Recreational, leisure and personal enrichment courses run on a non-award basis; and Continuing professional education that maintains a level of knowledge or keeps the knowledge up to date.

Hobby and recreational courses Hobby and recreational courses are not likely to add to the employment related skills of people undertaking the courses. These courses are not GST-free. For more details see ATO ruling on ACE courses (GSTR 2000/27) Sponsored Students/Corporate Funded Students Students occasionally may have their fees paid by sponsoring organisations. This has no effect on the GST status of the transaction. Workshops run co-operatively with other Universities The host University bears the initial cost of the facilitator. Input tax credits are available to the host on this cost. GST exclusive costs are split and then on-charged to other Universities inclusive of GST. Input tax credits are available to the University receiving the tax invoice for this charge.

47

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Lunches Lunches/meals charged with taxable or GST free courses are subject to GST. International Students GST free outputs include: • • •

GST free education course fees (including those received via overseas agents); Course fees charged to University students on an exchange program; and Overseas students studying by correspondence.

Outputs subject to GST include: • • •

Commissions from Private Health Insurance providers; Orientation fees; and Application fees (unless it guarantees the applicant a right to receive a tertiary education course).

Private Health Insurance Providers/Visa Applications Compulsory overseas health cover premiums are collected from the students (received directly, or via an overseas agent) on behalf of the Private Health Insurance provider. The fees collected are then paid over to the Private Health Insurance provider. The University is paid a commission for performing this task. Visa application fees are collected from the students on behalf of Customs. The fees collected are then paid over to Customs. The University is merely acting as an agent collecting money from the students and handing it over to the service providers. The amounts collected are not treated as revenue and the payments are not treated as costs. Receipts and payments are merely passed through a clearing account. The GST inclusive amount of commission earned is deducted from the amount remitted to the Private Health Insurance provider. The GST portion must be remitted to the ATO. Overseas students studying by correspondence Fees charged to students residing overseas who complete a course at the University by correspondence will not be subject to GST. A supply outside Australia, and the enjoyment of which also takes place outside Australia, is not connected with Australia and therefore not subject to GST.

48

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Offshore courses Offshore courses (award or non-award) provided outside Australia will not be subject to GST, as they are not connected with Australia. This will apply to courses delivered by: • •

a non-Australian resident agent where students pay the agent and the agent pays the University; or University staff where students pay fees directly to the University itself.

Overseas courses run jointly with a third party Where the third party is a resident enterprise of the foreign country (and not an Australian resident) fees charged will not be subject to GST as they are not connected with Australia. Where the third party is an Australian resident and: • •

the University provides intellectual rights to that third party who, in turn, sells the course to overseas students, then the transaction is subject to GST; and the University provides intellectual rights to overseas students jointly with the third party, then the fees charged will not be subject to GST as they are not connected with Australia.

Two plus One award course An overseas student enrols in an award course where: • •

the first two years are completed overseas (GST free as either an export or not connected with Australia); and the last year is completed in Australia (GST free as education).

International Inputs Inputs incurred with no GST components include: • •

international flight tickets (see International travel); and commissions paid to overseas agents who are not registered for GST.

GST taxable transactions include: •

commissions remitted to local agents who are registered for GST.

49

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.2

Student Administration

To be GST free administrative services, they must be: • •

directly related to a GST free course; and supplied by the University (as the provider of the course).

Examples of GST free administrative services include: • • • •

enrolment services; examination arrangements; record keeping; and administratio n of the library.

Examples of administrative services that are not GST free include: • • •

hire of academic dress; student hall application fees; and graduation dinner.

Please refer to GST Ruling 2001/1 for further reference.

50

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.3

Course Materials

To be GST free, course materials must meet all of the following criteria: • • •

provided for a subject in a GST free course; provided by the supplier of the course itself, i.e. the University to the students. If the student purchases materials directly from a third party such as a stationer it is not a supply of course materials and therefore not GST free; and Necessarily consumed or transformed by the students undertaking the course, for the purpose of the course. Hence the effective life of course materials is limited to the duration of the course.

The term ‘consumed’ means destroyed or expended by use. For example, the supply of a workbook that requires the student to complete exercises in it is a course material and therefore is GST-free. The term ‘transformed’ means changed in form. Examples of materials that are changed in form include cooking ingredients in a home economics class, or wood in a manual arts class, or chemicals in a chemistry class. Goods that do not fall within the definition of ‘course materials’ that are sold to students are not GST free. The following are examples of course materials, and are therefore GST free: • • • • • • • • • •

photocopied or printed educational materials that specifically relate to the course; taped lectures that specifically relate to a course; a study guide consisting of a collection of extracts from publications and lecturers’ notes; course notes for a particular course; unexposed film and developing chemicals; consumables art supplies; ingredients used in a cooking class, wood used in a woodwork class and chemicals used in a chemistry class; work books that provide space for students to complete exercises, etc.; consumable stationery items to the extent to which they are necessary for the course; and scalpels used by medical students in surgical operations that cannot be sharpened.

The following are examples of materials that are not course materials, and are therefore subject to GST: • • • •

textbooks; textbooks, written by lecturers at the University that are sold on and off campus; binders used for assignments/theses; musical instruments;

51

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

• • • •

lab coats; computers; calculators; and sporting equipment.

52

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.4

Bookshop

Textbooks The sale of textbooks (and all other books) is subject to GST irrespective of whether the student is enrolled in a GST applicable education course. GST is still applicable on the sale of second hand textbooks. Course Materials The sales of course materials may only be GST free if supplied by the same entity supplying the course. Therefore items sold by bookshops that are not part of the University tax group may not be classed as GST free course materials (see course materials). If the bookshop sells course materials on behalf of the University (rather than for their own profit) then the sales may be treated as GST free. There are certain conditions that must be satisfied for the these materials to be sold GST-free: • • •

The University must retain ownership of the materials that are being sold; and Your agent can identify the student (by proof of current student ID); and Lecture notes and materials are listed on a booklist as being required by the student to undertake their course.

Gift vouchers The sale of a gift voucher with a stated dollar value is not subject to GST as it is merely an exchange of currency and not a taxable supply. The consideration for the voucher cannot exceed the monetary value of the voucher. The redemption of these gift vouchers is subject to GST. Sales of movie ticket books are subject to GST as they are not limited to a stated dollar value. Other Sales The following sales from the bookshop will be subject to GST (unless they are classed as course materials): • • • • • • •

photographic films and processing; publications; dry cleaning commissions; CDs, DVDs and audio/video tapes; computers, calculators and software; clothing; and postgraduate and undergraduate handbooks.

53

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.5

Grants, Appropriations and Research

Supplies made in connection with the receipt of a grant will be subject to GST where the grant represents consideration for a supply. Only grants that are completely unconditional will be GST free. If there is no obligation tied to the grant and no other material supply is to be provided by the University in return for the grant no GST will be payable. Grants that have no GST will be treated like donations or gifts (see Donations). If the supply for which the grant is consideration is not a taxable supply, there will be no GST payable. Also, if there is no supply for the grant, there will be no GST payable. Regardless of how the agreed value of the grant is calculated, the GST will always be equal to1/11th of that value. As the gross amount received is reduced by GST to arrive at the amount available to the University GST must be factored into the grant application. Different organisations that offer grants will account for GST in different ways. Many organisations will offer different suggestions and many government organisations may feel that the grant is an appropriation and no GST is applicable (see appropriations below). The important thing to remember is that the University is the supplier of the services and in most cases the University determines the value of those services and therefore it is the University’s responsibility to ensure that GST is accounted for. Appropriations Appropria tions are a complex area for GST purposes and the University is still in negotiation with the ATO to confirm the GST treatment of specific appropriations. Accordingly, any concerns about the GST treatment of an appropriation should be referred to the University Tax Team. Generally, appropriations refer to the non-commercial activities of government and they are deemed as outside the scope of GST. To be an appropriation: • • •

there is a payment between government related entities; the authority to make the payment is found in an Act (or other legislation); and either it is a specific transaction between government related entities, or it is not part of a commercial transaction.

It is necessary to fulfil these requirements otherwise the payment will not be defined as an appropriation.

54

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

Research Grants Research grants received by the University are likely to be considered as taxable supplies and therefore will give rise to a GST liability. This is because the University generally undertakes to provide research in return for the grant money. This is a supply for the purposes under the GST legislation. Generally, where research is provided to an overseas entity and is not supplied to an Australian entity, the transactions are treated as GST-free (as long as other requirements are met).

55

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.6

Research

For research grants see section 7.5. In addition, contract research is subject to GST Co-operative Research Centres Co-operative Research Centres are common to some Universities, however the tax treatment of these will depend on the structure of the agreement. Please seek further advice on this issue.

56

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.7

Sponsorships and Scholarships

The University may receive funding from external parties, for example, scholarships, and as a condition, provide naming rights in exchange. These and other forms of sponsorship are generally subject to GST as advertising/promotional services are exchanged for consideration. However, if the services provided by the University in exchange for the sponsorship do not result in a “material benefit” for the external party providing the funding sponsorship, then the funding may be considered a donation and outside the scope of GST (refer to discussion of “material benefit” under section 7.8 “Donations”). Sponsorship income is also subject to GST where law firms sponsor mock courts in exchange for naming rights (“mooting income”). Receipt of Bursaries v Scholarships A bursary generally is paid as a lump sum directly from the funding body to the student. As the funds are not credited to the University there are no financial or GST implications on the University. Scholarships A scholarship is generally paid to the student from the funding provider, with the University acting as the middleman. Generally the receipt of the funding is subject to GST (unless treated as a donation). If treated as a donation, the payment of the scholarship to the student will be out of the scope of GST. Funding received for scholarships may be treated as donations only if no material benefit passes back to the donor (see Donations). Contra deals Occasionally sponsorship (or other in kind services), rather than cash, will be exchanged for sponsorship. If both parties are registered for GST, then: • •

both parties must supply tax invoices to the other (and are liable for GST of 1/11th of the GST inclusive market value of the sponsorship / in-kind service); and both parties must hold tax invoices in order to claim input tax credits.

Examples include: • • •

advertising of the University on the radio/television/newspaper provided in exchange for advertising space in University publications; catering services provided in exchange for advertising space in University publications; air flights provided in exchange for advertising space in University publications; and

57

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005



where a research partner includes in a research agreement the provision of use of facilities and staff time in exchange for research (or a share in research) equivalent in value to the in kind support provided.

58

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.8

Donations

For a transaction to be subject to GST there must be, among other criteria, a supply of goods or services in exchange for monetary or non-monetary consideration. As donations do not involve an exchange of goods or services for consideration, they are generally outside the scope of GST. To determine if a receipt is a donation the nature of the benefactor and the nature and circumstances surrounding their payment must be considered. If the donor receives a ‘material benefit’ from the University (the beneficiary) for making the donation the transaction is no longer considered a donation and it becomes subject to GST. Material benefit According to the ATO Issues log item E51 “A material gain or benefit would not include acknowledgements such as a mention in a newsletter or periodical, or a pla que if the plaque is a small cost and is not prominent. However, enlarging the acknowledgement into forms of advertising would result in a material gain or benefit flowing to the donor”. Individuals & Foundations Donations from individuals will generally be outside the scope of GST, providing the individual receives nothing other than naming rights or progressive expenditure reports in return. However, should individuals receive intellectual property, or early result reporting, then the donation is potentially a GST taxable supply. Donations from foundations will be treated similarly to individuals. Prizes Funding is received from individuals and organisations specifically for the payment of student prizes. Prizes may be offered directly to the student where the prize is not banked into the University bank account (i.e. the cheque is made out to the student). As the University merely selects the student there are no GST implications for the University. Receipt of funding for prizes without naming rights passing back to the donor are considered as donations, and are therefore outside the scope of GST. Receipt of funding for prizes with naming rights passing back to the donor may also be considered as donations, and outside the scope of GST if no “material benefit” passes back to the donor. In the event that the donor receives a material benefit, for example where the funding amounts to sponsorship, then the funding will be subject to GST.

59

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.9

Fund Raising

GST will generally be applicable to fundraising events. However as a charitable organisation the University may chose to treat certain fund-raising events as input taxed. Where this choice is made, the University does not charge GST on fund-raising events and will not be able to claim input tax credits on acquisitions made in relation to those events. This election may be beneficial where the fundraising event is of a type that there is a fixed market price for the supply of the event and for example the ticket price cannot be increased for the GST. The event must be: • •

conducted for the purpose of fund-raising; and separate from and not form any part of a series or regular of like or similar events (i.e. fifteen fundraising events in any income year).

A fund-raising event is: • •



a fete, ball, gala show, dinner, performance or similar event. A similar event may include a charity auction; an event comprising the sale of goods (excluding alcohol beverages or tobacco products) where the consideration received for the item does not exceed $20 or such other amount as specified by regulation. Events that involve the selling of small items such as flowers, confectionery and chocolate are covered here, as the selling of such items is not a normal part of the University’s business; and an event that the Commissioner decides is a fundraising event. The University make an application in writing to the Commissioner to request that an event it is conducting be treated as input taxed.

60

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.10

Parking

Parking services that are subject to GST include: • • • • •

parking fees charged to students, staff, contractors, commercial tenants and the general public; vending machine collections; sales of parking ticket books; permit replacement fees; and reimbursement of GST taxable costs incurred by offenders.

Transactions out of the scope of GST include: • • •

authority cards and other services provided to other departments of the University; parking fines (includes the original fine, the fines enforcement registry charge and the late payment fee); and final demand fee.

61

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.11

Fines

Fines are generally outside the scope of GST as there is no supply in return for the payment. Fines include: • • •

original parking fines; fines enforcement registry charge; and the late payment fee.

Library Fines Lost, overdue or damaged book fines, or accumulation of minor misdemeanor points fines would also be considered outside the scope of GST as a fine. Where the fine is equal to the replacement for a lost book, this amount will be subject to GST.

62

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.12

Library/Information Services

The main function of the library is to provide a book loans system to students free of charge. Other functions are performed, some of which are free of charge and others are provided for a fee. Services provided by the library are generally subject to GST. Administration of the library is considered a GST free administration service. However, when supplies are made on a user pays basis, the supply will be subject to GST if it is taxable. Library functions and information services that are subject to GST, include: • • •

binders used for assignments and theses; membership fees; and user pays basis for photocopying, printing, lamenting, internet usage etc.

Library functions that are not subject to GST include: • • •

access to library books, periodicals and manuals; access to computers and other on-line services; and access to computer laboratories.

63

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.13

Consulting

Consulting may be defined as the provision of expertise to external entities at a commercial rate. These outputs are subject to GST, provided they are supplied in connection with Australia. This definition may be extended to: • • • • • • • • • •

honorariums earned by professors but paid to the University; contract research; non-award short course training provided to organisations within Australia; athletic testing services; hire out of staff to perform and tour with orchestras; hire out of furniture; provision of security services; production of web pages; recreational field trips (for curriculum related field trips see field trips); and sale of information and statistics.

64

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.14

Health

If the University provides: • • •

general practitioner health services to students and the general public; counselling and psychological services to students and general public; and other specific health services to people with disabilities.

The provision of medical services is generally GST free provided: • •

the service is provided by a “recognised professional” (see below); and the service is generally accepted as being necessary for the treatment of a patient.

GST free medical services include: • • • •

health practitioners’ consultation fees; sales of goods, such as bandages, in the course of providing GST free treatment to the patient as long as the goods are sold on the same premises; sale of medical aids and appliances provided these are not “widely used” by people without an illness/disability; and psychological services provided to students.

Services that are not GST free include: • • • •

medical services provided by non medical practitioners (such as students); practice Incentive Program receipts from the Health Insurance Commission (HIC); immunisation Incentive Receipts from HIC; and child study centre psychological services charged to schools. As the service is supplied to the school rather than the patient the charge is subject to GST. This service may be deemed as consultancy.

Recognised professional Where a person other than a recognised professional provides a component of the medical supply, that component will not be GST-free unless: • that person is also a recognised professional; or • the recognised professional directly supervises the component of the supply.

65

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

It is considered that a person will be directly supervised where the recognised professional: • • • • •

attends the patient at the commencement of the treatment and at the subsequent commencement of each new treatment; and is readily available for the whole of the time that the assistant is working with the patient; and that the recognised professional be available to take appropriate action in the case of an emergency; and determines all of the appropriate treatment to be provided by the assisting person; and Can satisfactorily prove that they monitor the services of the unqualified staff.

Other Safety and Health Supplies Other safety and health supplies which are provided by the University to external entities, and which are taxable supplies include: • • • • • • • • •

training course fees; book sales; recalibration services; minor service charges; hire of equipment for fees; sales of waste boxes and liners; waste disposal services; consultancy services; and miscellaneous sales.

66

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.15

On-charging Salaries

The University may pay salaries to individuals who are contracted to other entities, such as the hospitals, who are not included in the University GST group. Either the entire salary, or a portion there-of, is charged out to that entity/organisation at cost. An example of this would be under a Secondment arrangement. The payment of the salary by the University to the employee is not subject to GST. The on-charge of the salary to the organisation is subject to GST and therefore 10% is levied on top of the cost. A tax invoice must be supplied by the University to enable the organisation to claim back the GST as input tax credits. Example The University pays an employee a gross salary of $100. The salaries account is costed with $100. The University then charges the Hospital the GST inclusive amount of $110. The salaries recoveries account is credited with $100 for a net gain of nil. The GST account is credited with $10, which is then paid to the ATO.

67

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.16

Salary deductions

The University calculates gross salaries and makes deductions to arrive at a net salary payable. The deductions are either retained by the University (when the University is the service provider) or remitted to external service providers on behalf of the employee. The payment of net salaries and wages is not subject to GST. Transactions out of the scope of GST include: • deduction of PAYG withholding tax from gross salaries; and • deductions from net salary on behalf of external entities such as union fees, superannuation contributions, health fund contributions and gym fees. The University is merely acting as an agent by deducting fees and remitting them to service providers. GST taxable transactions include:



• deductions for taxable supplies providing by the University (e.g. Parking fees); • deduction of salary packaging fees (see salary packaging); • commissions earned; and employee contributions.

GST free transactions include: •

deduction of amounts for GST free supplies provided by the University.

Salary Packaging The University provides salary packaging service to its employees. Fees are charged for this service by payroll deduction. This service is subject to GST.

68

IMPORTANT DISCLAIMER: This tax manual has been developed as a joint effort by the public universities in Western Australia. No person should rely on the contents of this tax manual without first obtaining advice from your University's tax accountant or other qualified professional. This tax manual has been provided as a general reference guide, on the terms and understanding that the authors are not responsible for the results of any actions taken on the basis of information in this tax manual, nor for any error or omission therein. The authors and all Universities involved in the development and update of this tax manual expressly disclaim all and any liability and responsibility to any person, in respect of anything done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this tax manual. You should not rely on this tax manual for your personal income tax obligations.

Taxation Manual GOODS AND SERVICES TAX (GST)

Section

:

3.0

GST APPLICABILITY TO UNIVERSITY TRANSACTIONS

Part

:

3.5

Revised Date

: 24.07.2005

7.17

Accommodation

Accommodation provided for students of the University incorporates several classes of fees, some of which are taxable while others are input taxed. Long term accommodation provided for students during semesters is classed as the supply of noncommercial residential premises and is therefore input taxed in accordance with Division 40-B. Division 87 applies to commercial residential premises. However, section 195-1 states that “commercial residence” does not include accommodation for students in connection with an educational institution and therefore Division 87 is not available to the University. Long term accommodation provided to non-students (provided that at least 70% of the guests stay for longer than 27 days) is: • subject to GST on 100% of the full value of the first 27 days; and • subject to GST on 50% of the GST inclusive price of the supply (had the supply been taxable) for the period after the first 27 days. Short term accommodation (

Suggest Documents