ATO ID 2004/438: GST and supply of a religious pastoral ministry course
Date of decision: 20 July 2001
Business line: Indirect Tax

Issue
Is the entity, a religious institution, making a GST-free supply under section 38-220 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a course in religious pastoral ministry?

Decision
No, the entity is not making a GST-free supply under section 38-220 of the GST Act when it supplies a course in religious pastoral ministry. The supply of the religious pastoral ministry course is a taxable supply under section 9-5 of the GST Act.

Facts
The entity is a religious institution. The entity supplies a course in religious pastoral ministry. The course is essential for someone wishing to become a chaplain at a religious institution. Completion of the course will entitle the student to a credit in theology studies at tertiary level. The supply of the course is not a GST-free supply of an education course under Subdivision 38-C of the GST Act. The entity is registered for goods and services tax (GST) and the supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for decision
Summary: Under section 38-220 of the GST Act, a supply is GST-free if it is a supply of service that: The entity is a religious institution and therefore satisfies the first requirement. To satisfy the second requirement, a service must be integral to the practice of that religion. Examples of these services include religious services provided at ceremonies such as weddings, baptisms or funerals that are conducted in accordance with the canons of conduct for the members of that religious institution. The training of a student is not the supply of a religious service that is integral to the practice of that religion. Accordingly, the entity's supply does not meet all of the requirements of section 38-220 of the GST Act and the entity is not making a GST-free supply when it supplies a course in religious pastoral ministry. 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 any other provision in Division 38 of the GST Act nor input taxed under 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 course in religious pastoral ministry.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 section 38-220 Division 38 Subdivision 38-C Division 40
Subject references: Goods and services tax GST non profit GST religious services GST supplies & acquisitions Taxable supply