Changes to GST a welcome development for education institutions?

By Rhys Guild, Jane Spencer and Rebecca Healy

A Federal Court decision made the headlines recently, raising concerns as to how student accommodation should be treated for goods and services tax (GST) purposes. While in other news, a broader range of government funding received by public Australian universities may not be subject to GST thanks to changes to the appropriations exemption.

With GST firmly in the spotlight, we look at the implications of both developments on the higher education sector.

The recent Federal Court ruling in ECC Southbank Pty v FCT highlights the uncertainty associated with the GST treatment of student accommodation. In what could be described as an ugly outcome (for the students at least), the court concluded that the provision of ‘off campus’ accommodation was a taxable supply of commercial residential premises attracting GST. Unfortunately, and somewhat inexplicably, it would appear that the court was not asked to address the exception for ‘premises to the extent that they are used to provide accommodation to students in connection with an education institution’…

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