Private ruling: GST and nominal consideration
Date of advice: 30 March 2023
Published: 22 May 2023
Ruling period: XX XXX XXXX to XX XXX XXXX
Date scheme commenced: XX XXX XXXX

Ruling: Q1: Will the sub-lease from Entity A to Entity B be a GST-free supply pursuant to section 38-250 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the sub-lease by Entity A to Entity B will be considered GST-free provided that, using the proposed methodology in question 3, the supply is for consideration that is for less than 75% of the GST-inclusive market value of the supply. | Q2: Will the sub-lease from Entity A to Entity C be a GST-free supply of accommodation pursuant to section 38-250 of the GST Act? | A2: Yes, the sub-lease by Entity A to Entity C will be considered GST-free provided that, using the proposed methodology in question 3, the supply is for consideration that is for less than 75% of the GST-inclusive market value of the supply. | Q3: For the purposes of the GST-free provisions in section 38-250 of the GST Act does the Commissioner agree with the proposed methods for determining the market value of supplies made by Entity A under the sub-lease to Entity C and the head lease to Entity B? | A3: Yes, the Commissioner agrees with the proposed methodology for determining the market value of supplies of the residential premises. Relevantly, the methodology has appropriately applied the 'same supply test' and/or the 'similar supply test' discussed in the Charities Consultative Committee, Non-commercial activities of charities, cost of supply and market value tests (Issues Register). According to paragraph 44 of the Issues Register charities need to take into account the following when making the comparison: The proposed methodology effectively compares the same and/or similar types of residential premises for categorising the accommodation provided. On this basis the Commissioner agrees with the proposed methodology for determining the market value of supplies of the residential premises.


Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-250


the locality of the supply or area of the market | the quality or nature of supply | the size, quantity or duration of supply | other charitable or commercial suppliers, and | the number of comparisons.