International operation issues - GST Fact Sheet 14
For GST purposes, transactions made by registered businesses can be classified as one of three types of activities:
- Normal taxable activities;
- GST-free activities; or
- Input-taxed activities
No GST is included in the price of a GST-free supply. Where no GST is charged (because the supply is GST-free), registered businesses will be unable to claim back any input tax credits because no GST was paid. Division 38 of the GST Act covers all items that constitute GST-free supplies. Among this list are exports (refer to section 1.1 below) and education (refer to section 1.2 below). Included under the Education category are education courses, course materials and administrative services that are connected with the provision of education.
Contained below are information for lecturers (section 2.0), and students (section 3.0) and any GST implications on their activities with regards to the RMIT University international operations.
It should be noted that no other taxation laws (except Australian Taxation Laws) have been considered when preparing this fact sheet. The provision and consumption of services outside Australia may be classified as an export and therefore has the potential to be GST-free.
Subsection 3 8-190(1) of the GST Act lists supplies of things that are GST-free as exports. This list of GST-free exports include:
(a) A supply that is made to a recipient who is not an Australian resident and is not in Australia when the thing supplied is done (other than a supply directly connected with goods situated in Australia when the thing supplied is done, or with real property situated in Australia); and
(b) A supply that is made to a recipient who is not in Australia when the thing supplied is done and the effective use or enjoyment of which takes place outside Australia (other than a supply directly connected with goods situated in Australia when the thing supplied is done, or with real property situated in Australia).
(c) A supply made in relation to rights if the rights are for use outside Australia or the supply is to an entity that is not an Australian resident and is outside Australia when the thing supplied is done.
Under subsection 38-190(3), a supply covered by paragraph (a) above is not GST free if:
- It is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and
- The supply is provided, or the agreement requires it to be provided, to another entity in Australia
An education course will be GST-free where it falls within one of the following categories of an education course:
- A pre-school course; or
- A primary course; or
- A secondary course; or
- A tertiary course; or
- A Masters or Doctoral course; or
- A special education course; or
- An adult and community education course; or
- An English language course for overseas students; or
- A first aid or life saving course; or
- A professional or trade course; or
- A tertiary residential college course.
It is understood that RMIT only provides education under the following categories:
- Secondary course;
- Tertiary course;
- Masters or Doctoral course;
- Adult and community education course;
- English language course for overseas students;
- Professional or trade course.
4.1 Short term assignments
Visiting lecturers to the universities outside Australia for short-term assignments will not charge GST on their services overseas. This is because their services will be classified as an export (under subsection 38-190(3) of the GST Act), to the overseas company/university and hence GST-free.
4.2 Travel and accommodation expenses
Any travel to and from an overseas destination will not be subject to GST. These also Are classified as an export under subsection 38-190(4) of the GST Act.
Any accommodation expenditure incurred whilst overseas will not be subject to any Australian Taxation laws.
5.1 Course attended by local students in their home country
Any course undertaken overseas will not be considered as an Australian accredited course. However, as the course undertaken by overseas residents is being completed outside Australia, there should not be any GST implications. The provision of teaching services by Australian residents is considered an export of services under subsection 38-190(1) of the GST Act. The provision of teaching services by local staff will have no GST implications.
The use of any on-line technology to deliver courses or other programs to overseas students (who are outside of Australia) will be considered as a supply in relation to a right, and will be GST free because it is for use outside Australia. The student should provide RMIT University with a foreign address and website.
5.2 Export of course materials or textbooks from Australia for use overseas
Any exports of course materials or textbooks for use by students overseas are GST free under section 38-185 if:
- RMIT University exports the books and other goods from Australia before, or within 60 days after:
- The day on which RMIT receives any consideration for the supply; or
- If, on an earlier day, RMIT gives an invoice for the supply – the day in which the supplier gives the invoice.
These items will therefore be GST free for purchase by students overseas, from any bookshop there or from their University.
5.3 Course attended by Australian residents overseas who undertake part of their course outside Australia
Any Australian resident student that transfers to a non-Australian university outside Australia, to complete one subject of their course or the rest of their course will also be entitled to GST free services because the courses they are completing are being completed outside Australia.[Next: Supporting documents and information ]