Goods and Services Tax (GST)Goods and Services Tax (GST)
As mentioned in the March AEO Newsletter Study in Australia, the following information is provided to help advisors sort out the new Australian GST. Below you will find a reprint of the newsletter article as well as some helpful links. The most appropriate people to contact for more information about how this will impact your students are the International Office Staff at the specific Australian university the student will be attending. The AEO is available as an information source as well.
Australia will introduce a Goods and Services Tax (GST) of 10% on 1 July 2000. As study abroad advisors, what impact will that have upon your students who go to Australia? While some things are not yet clear, this article will try to provide a brief overview of some of the things that will be GST liable and those that will be exempt.
Please be aware that when you or students prepare a budget for studying in Australia it would be inaccurate to assume that everything will be 10% more expensive as of 1 July. At present, there are many wholesale taxes placed on goods in Australia, and the tax rate varies depending upon the good. This means that in some cases, goods are taxed a lot more than 10%. Generally the wholesale tax will disappear when GST is imposed.
The real question however, is what will GST mean for US and Canadian study abroad students in Australia. The Australian Taxation Office (ATO) has already determined that degree courses at registered institutions will be GST free. Unfortunately, a semester or academic year abroad falls into a gray area when determining GST liability. Courses taken for pleasure which do not result in a degree being granted are GST liable so using this strict definition study abroad could be liable. However, since study abroad students are working toward a degree at an overseas institution, study abroad should be GST free. The latest information we have is that the Australian Taxation Office has made individual ratings that study abroad will be GST-free, but no final decision has been announced.
Regardless of the decision on tuition, students will be affected in other areas. The most significant will probably be housing which will be GST liable, whether a student is living on-campus, in a home-stay, or has rented a flat. Travel will also be GST liable as tickets, accommodation, and meals in restaurants will all be assessed the 10% GST.
Even if a lease is signed or tickets are purchased before 1 July, GST will be assessed for any of the goods or services purchased which will be delivered after 1 July. So for example, a lease signed from 1 June until 31 December would include 1 month with no GST and six months with a GST assessment.
Books, university union fees, and other expenses which students generally incur will usually be GST liable. Any lab fee or payment a student may have to make for a course for the use of equipment which the student will not keep should not be GST liable. Unprepared food will be GST free in most cases. The rules and regulations on food which will be GST liable and that which will be GST free are quite complicated. For example, bread will be GST free unless it is has icing on it in which case it is GST liable. For those with a sweet tooth candy ice cream and soft drinks will all be GST liable.
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