ATO ID 2002/971: GST and the supply of accommodation in a university residential college to non-students for periods of less than 28 days
Date of decision: 30 August 2002
Business line: Indirect Tax

Issue
Is the entity, a university, making an input taxed supply of residential premises under section 40-35 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days?

Decision
No, the entity is not making an input taxed supply under section 40-35 of the GST Act when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days. The entity is making a supply of accommodation in commercial residential premises. The supply is a taxable supply under section 9-5 of the GST Act.

Facts
The entity is a university. The entity is not a charitable institution or a gift-deductible entity. The entity supplies hostel-style accommodation (consisting of board and lodging) in a university residential college to both students and non-students. The entity supplies the non-student with accommodation in the residential college for a period of less than 28 days. To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' (see ATO ID 2002/969). The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for decision
Summary: Under section 40-35 of the GST Act: The entity supplies the non-student with accommodation in a university residential college. This supply is a supply of residential premises used predominantly for residential accommodation and is input taxed under section 40-35 of the GST Act unless the university residential college is 'commercial residential premises'. To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' (see ATO ID 2002/969). As the entity is making the supply to a non-student, the premises are 'commercial residential premises'. Therefore, the supply is not input taxed under paragraph 40-35(1)(a) of the GST Act. Division 87 of the GST Act only applies to accommodation provided for a continuous period of 28 days or more. As the entity is supplying the non-student with accommodation for a period of less than 28 days, Division 87 does not apply to the supply. Therefore, the supply cannot be input taxed under paragraph 40-35(1)(b) of the GST Act. The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under any other provisions in Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies a non-student with accommodation in a university residential college for a period of less than 28 days.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 Division 38 Division 40 section 40-35 paragraph 40-35(1)(a) paragraph 40-35(1)(b) Division 87
Related ATO interpretative decisions: ATO ID 2002/969 | ATO ID 2002/970
Other references: The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales.
Subject references: Goods and services tax GST education Student accommodation - tertiary GST property & construction GST commercial residential premises GST long term accommodation GST residential premises GST residential rents GST long term accommodation GST residential premises