Private ruling: GST and second-hand goods
Date of advice: 9 April 2026
Published: 29 June 2026
Ruling period: XX/XX/20XX to XX/XX/20XX
Date scheme commenced: XX/XX/20XX

Ruling: Q1: Is your supply of a product acquired from a Community Recycling Centre (CRC) collection bin GST-free under subsection 38-255(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) where you: (a) perform quality assurance on the product? (b) transfer the product to a different container? (c) split the product into smaller quantities? (d) combine the product with an identical product? (e) mix the product with a different product? (f) add an additive to the product? | A1: (a) Yes, because performing quality assurance on the product does not change its original character. (b) Yes, because transferring the product to a different container does not change its original character. (c) Yes, because splitting the product into smaller quantities does not change its original character. (d) Yes, because combining the product with an identical product does not change its original character. (e) No, because mixing the product with a different product changes its original character. (f) No, because adding an additive to the product changes its original character. | Q2: Is your supply of a product acquired from entities that have used it, but do not sell it, GST-free under subsection 38-255(1) of the GST Act where you: (a) perform quality assurance on the product? (b) transfer the product to a different container? (c) split the product into smaller quantities? (d) combine the product with an identical product? (e) mix the product with a different product? (f) add an additive to the product? | A2: (a) Yes, because performing quality assurance on the product does not change its original character. (b) Yes, because transferring the product to a different container does not change its original character. (c) Yes, because splitting the product into smaller quantities does not change its original character. (d) Yes, because combining the product with an identical product does not change its original character. (e) No, because mixing the product with a different product changes its original character. (f) No, because adding an additive to the product changes its original character. | Q3: Is your supply of a product acquired from entities that manufacture, sell, or exchange the product GST-free under subsection 38-255(1) of the GST Act where you: (a) perform quality assurance on the product? (b) transfer the product to a different container? (c) split the product into smaller quantities? (d) combine the product with an identical product? (e) mix the product with a different product? (f) add an additive to the product? | A3: (a) No, because the product is not second-hand. (b) No, because the product is not second-hand. (c) No, because the product is not second-hand. (d) No, because the product is not second-hand. (e) No, because the product is not second-hand, and mixing it with a different product changes its original character. (f) No, because the product is not second-hand, and adding an additive to the product changes its original character.

Relevant facts and circumstances: About you You are an Australian-based entity and have an ABN. You are a charity registered with the Australian Charities and Not-for-profits Commission. You are endorsed as a charity for GST concessions. You acquire a variety of products and sell them to customers. You acquire products through the following channels: • Dedicated collection bins located in CRCs. • Drop-offs at your shop. • Collection arranged with entities from whom you pick up products. You do not operate any other designated collection points. Product source: CRC collection bins You collect products from designated collection bins located in CRCs. You are not party to any written formal agreement with the CRC operators. Residents bring items, including relevant products, to these CRCs for disposal. The CRC operators collect and provide the products to you. You do not provide payment or other consideration to the CRC operators for the products collected. You do not receive payment or other consideration from the CRC operators for collecting the products. Neither you nor the CRC operators obtain information about the origin of the relevant products, or whether they were new or used. When collecting the products from collection bins, you screen them. Products considered too old based on their packaging are not accepted and are disposed of at the CRC. After screening, you transport the products to your shop. The products are stored and then subjected to quality assurance and cataloguing. Product source: entities that have used the product Prospective donors contact you to enquire about giving you their products. These entities have used the product; they do not sell, exchange, or manufacture the product. Donors are invited to deliver suitable products to your shop. You decline offers where the products appear unsuitable. You do not provide payment or any other consideration to donors for the products they provide. Product source: entities that manufacture, exchange, or sell the product You contact entities that manufacture, sell, or exchange the relevant products to enquire whether they will provide you with products. These entities generally do not provide information about whether a product is new or used, and you do not require them to provide this information. You do not provide payment or any other consideration to the entities for the products they provide. Your sales channels You sell products online and in-store. Your inventory management and record-keeping You do not record the source, donor type, or date of receipt for the products you acquire. You record certain information about each product, such as the brand and its suitable use. Your handling and preparation before sale Your usual handling of products includes cleaning the containers and removing any unwanted debris. Any product with quality issues is set aside for disposal. Transfer to different containers Your standard approach is to sell the product in the container in which it is received. Splitting products for customers You may sell smaller quantities of a product by transferring the product from a larger container into a smaller container. Combining products You may combine small residual quantities of products, but only where they are the same brand and type. Custom mixing products You may mix two or more products together at a customer's request. Adding an additive to the product You may add an additive to a product for an additional charge.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-255 | A New Tax System (Goods and Services Tax) Act 1999 section 176-1 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: (a) Yes. The product is second-hand, was gifted to you, and retains its original character when you perform quality assurance on it. (b) Yes. The product is second-hand, was gifted to you, and retains its original character when you transfer it to a different container. (c) Yes. The product is second-hand, was gifted to you, and retains its original character when you split it into smaller quantities. (d) Yes. The product is second-hand, was gifted to you, and retains its original character when you combine it with an identical product. (e) No. Although the product is second-hand and was gifted to you, mixing different products means it no longer retains its original character. (f) No. Although the product is second-hand and was gifted to you, adding an additive materially alters the product so that it no longer retains its original character. | Detailed Reasoning - Are you an endorsed charity?: An entity will be an endorsed charity under section 176-1 of the GST Act if it is entitled to become endorsed and applies for that endorsement. You are an endorsed charity under section 176-1 of the GST Act. Therefore, you satisfy the requirement that the good be supplied by an endorsed charity under paragraph 38-255(1)(a) of the GST Act. | Detailed Reasoning - Is the product a 'second-hand good'?: A good supplied by an endorsed charity must be a 'second-hand good' to be GST-free under subsection 38-255(1) of the GST Act. The meaning of 'second-hand goods' under section 195-1 of the GST Act is exclusive rather than inclusive. It does not define what a 'second-hand good' is but specifically excludes particular goods such as animals, plants, and some valuable metals. Our view regarding the meaning of 'second-hand goods' in the context of subsection 38-255(1) of the GST Act is set out in Part 6 of the Goods and Services Tax Charities Consultative Committee - Resolved Issues: Second-hand goods . A second-hand good includes a good that has been used previously. However, a good will not be second-hand if it was acquired for the purposes of manufacture, sale, or exchange. Products that have been disposed of at a CRC, and that the CRC operators provide to you, are second-hand goods for the purposes of subsection 38-255(1) of the GST Act. | Detailed Reasoning - Is the product a 'gift' to you?: The third relevant requirement for a supply to be GST-free under subsection 38-255(1) of the GST Act is that the thing supplied must have been a gift to the charity. The term 'gift' is not defined in the GST Act. Our view is outlined in Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments (GSTR 2012/2). Paragraph 70 of GSTR 2012/2 explains that a gift is characterised by a transfer of property that is made voluntarily, arises by way of benefaction, and no entity receives any material benefit or advantage from you in return. Products placed into your marked collection bins are transferred to you without formal contractual obligation, payment, or other benefit. The transfer is voluntary, arises by way of benefaction to you, and no entity receives any material benefit or advantage from you in return. Therefore, the transfer of a product to you in this manner is a gift for the purposes of subparagraph 38-255(1)(b)(i) of the GST Act. | Detailed Reasoning - Is the 'original character' of the product retained?: The final relevant requirement for a supply to be GST-free under subsection 38-255(1) of the GST Act is that the goods must retain their 'original character'. The GST Act does not define this term. Our view on 'original character' is outlined in Part 6 of the Goods and Services Tax Charities Consultative Committee - Resolved Issues: Second-hand goods , which discusses examples involving t-shirts, buttons, and lace. Goods retain their original character where they continue to perform the same essential function. You may undertake any of the following activities in relation to a product you receive: (a) perform quality assurance (b) transfer the product to a different container (c) split the product into smaller quantities (d) combine the product with an identical product (e) mix the product with a different product (f) add an additive to the product We must consider whether these activities change the 'original character' of the products. | Detailed Reasoning - (a) Performing quality assurance on a product: Your quality assurance process includes removing debris and cleaning the product. These steps are restorative or preparatory in nature. They do not change the intrinsic character of the product. Therefore, a product retains its original character for the purposes of subsection 38-255(1) of the GST Act when you perform quality assurance on it. | Detailed Reasoning - (b) Transferring a product to a different container: Transferring a product to a different container merely changes its packaging. This may be done for cosmetic, practical, or safety reasons. A change in container does not alter the inherent character of the product. Therefore, the product retains its original character for the purposes of subsection 38-255(1) of the GST Act when you transfer it to a different container. | Detailed Reasoning - (c) Splitting a product into smaller quantities: Dividing a product into smaller quantities does not alter its composition or intended use. This does not involve a transformation of the product itself or its essential characteristics. Therefore, a product retains its original character for the purposes of subsection 38-255(1) of the GST Act when you split it into smaller quantities. | Detailed Reasoning - (d) Combining a product with an identical product: Combining a product with an identical product produces a single batch of the same type of product. Its composition and intended use remain unchanged. Therefore, a product retains its original character for the purposes of subsection 38-255(1) of the GST Act when you combine it with an identical product. | Detailed Reasoning - (e) Mixing a product with a different product: Mixing a product with a different product produces a mixture that differs in composition from its original state. A new good is created as a result. Therefore, a product does not retain its original character for the purposes of subsection 38-255(1) of the GST Act when you mix it with a different product. | Detailed Reasoning - (f) Adding an additive to the product: Adding an additive changes the chemical composition and functional properties of the product. As a result, the treated product becomes a different good from the one originally received. Therefore, a product does not retain its original character for the purposes of subsection 38-255(1) of the GST Act when an additive has been added to it. | Detailed Reasoning - Conclusion on Question 1: Therefore, as you are an endorsed charity and acquire second-hand goods from CRC collection bins as a gift, your supply of a product is GST-free under subsection 38-255(1) of the GST Act where you perform one or more of the following actions that do not change the product's original character: (a) perform quality assurance on the product. (b) transfer the product to a different container. (c) split the product into smaller quantities. (d) combine the product with an identical product. However, performing any of the following actions will cause the product to not retain its original character, and therefore your supply of the product will not be GST-free under subsection 38-255(1) of the GST Act: (a) mix it with a different product. (b) add an additive to it. | Detailed Reasoning - Question 2: Is your supply of a product acquired from entities that have used it, but do not sell it, GST-free under subsection 38-255(1) of the GST Act where you: (a) perform quality assurance on the product? (b) transfer the product to a different container? (c) split the product into smaller quantities? (d) combine the product with an identical product? (e) mix the product with a different product? (f) add an additive to the product? | Summary: (a) Yes, your supply is GST-free. The product is second-hand, was gifted to you, and retains its original character when you perform quality assurance on it. (b) Yes, your supply is GST-free. The product is second-hand, was gifted to you, and retains its original character when you transfer it to a different container. (c) Yes, your supply is GST-free. The product is second-hand, was gifted to you, and retains its original character when you split it into smaller quantities. (d) Yes, your supply is GST-free. The product is second-hand, was gifted to you, and retains its original character when you combine it with an identical product. (e) No, your supply is not GST-free. Although the product is second-hand and was gifted to you, mixing different products means it no longer retains its original character. (f) No, your supply is not GST-free. Although the product is second-hand and was gifted to you, adding an additive materially alters the product so that it no longer retains its original character. | Detailed Reasoning - Detailed reasoning: As discussed above, the supply of second-hand goods is GST-free under subsection 38-255(1) of the GST Act where, relevantly: • the supplier is an endorsed charity, • the supplier acquired the second-hand goods, • the supplier acquired the goods as a gift; and • the goods retain their original character. | Detailed Reasoning - Are you an endorsed charity?: As discussed above, you satisfy the requirement under paragraph 38-255(1)(a) of the GST Act that the goods be supplied by an endorsed charity. | Detailed Reasoning - Is the product a 'second-hand good'?: As discussed above, second-hand goods include those which have been used. However, a good will not be second-hand if it was purchased for the purposes of manufacture, sale, or exchange. You receive products directly from entities that have used them. None of these entities manufacture, exchange, or sell the products as part of their ordinary activities. Therefore, a product that you acquire from entities that have used it is second-hand for the purposes of subsection 38-255(1) of the GST Act. | Detailed Reasoning - Is the product a 'gift' to you?: As discussed above, whether a transfer of property is a gift depends on whether it was made voluntarily, arose from benefaction, and whether the giver received no material benefit in return. You provide no consideration to any entity for their donated goods. The contributions are made voluntarily and arise by way of benefaction. Therefore, the transfer of a product to you from entities that use the product is a gift for the purposes of subparagraph 38-255(1)(b)(i) of the GST Act. | Detailed Reasoning - Is the 'original character' of the product retained?: As discussed above, a good retains its original character where the dealing does not result in a material change to its composition or functional properties. The activities you undertake do not differ depending on how the products are received. As outlined above, the following activities do not change the original character of a product: (a) perform quality assurance on the product. (b) transfer the product to a different container. (c) split the product into smaller quantities. (d) combine the product with an identical product. In contrast, and as discussed above, the following dealings cause a product to lose its original character: (a) mix it with a different product. (b) add an additive to it. | Detailed Reasoning - Conclusion on Question 2: Therefore, as you are an endorsed charity and acquire second-hand goods from entities that use them as a gift, your supply of a product is GST-free under subsection 38-255(1) of the GST Act where you perform one or more of the following actions that do not change the original character of the product: (a) perform quality assurance on the product. (b) transfer the product to a different container. (c) split the product into smaller quantities. (d) combine the product with an identical product. However, performing any of the following actions will cause the product to not retain its original character, and therefore your supply of the product will not be GST-free under subsection 38-255(1) of the GST Act: (e) mix it with a different product. (f) add an additive to it. | Detailed Reasoning - Question 3: Is your supply of a product acquired from entities that manufacture, sell, or exchange the product GST-free under subsection 38-255(1) of the GST Act where you: (a) perform quality assurance on the product? (b) transfer the product to a different container? (c) split the product into smaller quantities? (d) combine the product with an identical product? (e) mix the product with a different product? (f) add an additive to the product? | Summary: (a) No, your supply is not GST-free. Although the product was gifted to you and retains its original character when you perform quality assurance, it is not second-hand because it has not previously been used. (b) No, your supply is not GST-free. Although the product was gifted to you and retains its original character when you transfer it to a different container, it is not second-hand because it has not previously been used. (c) No, your supply is not GST-free. Although the product was gifted to you and retains its original character when you split it into smaller quantities, it is not second-hand because it has not previously been used. (d) No, your supply is not GST-free. Although the product was gifted to you and retains its original character when you combine it with an identical product, it is not second-hand because it has not previously been used. (e) No, your supply is not GST-free. Although the product was gifted to you, it is not second-hand because it has not previously been used, and mixing it with a different product changes its original character. (a) No, your supply is not GST-free. Although the product was gifted to you, it is not second-hand because it has not previously been used, and adding an additive changes its original character. | Detailed Reasoning - Detailed reasoning: As discussed above, the supply of second-hand goods is GST-free under subsection 38-255(1) of the GST Act where: • the supplier is an endorsed charity, • the supplier acquired the second-hand goods, • the supplier acquired the goods as a gift; and • the goods retain their original character. | Detailed Reasoning - Are you an endorsed charity?: As discussed above, you satisfy the requirement under paragraph 38-255(1)(a) of the GST Act that the goods be supplied by an endorsed charity. | Detailed Reasoning - Is the product a 'second-hand good'?: As discussed above, second-hand goods include those which have been used. However, a good will not be second hand if it was purchased for the purposes of manufacture, sale, or exchange. You contact entities that sell, exchange, or manufacture relevant products in the ordinary course of their activities to enquire whether they have unwanted products they are willing to give you. Those that do so generally do not indicate whether the goods are new or used. These goods are held by the giving entities as part of their ordinary trading activities. Goods held in this manner form part of the entities' trading stock and do not meet the meaning of second-hand goods. Therefore, a product that you acquire from entities that manufacture, sell, or exchange the product is not second-hand for the purposes of subsection 38-255(1) of the GST Act. For completeness, we have considered whether a product acquired in this manner is a gift to you, and whether the product retains its original character. However, as you have not satisfied the requirement for the good to be a second-hand good, your supply cannot be GST-free under subsection 38-255(1) of the GST Act. | Detailed Reasoning - Is the product a 'gift' to you?: As discussed above, whether a transfer is a gift depends on whether it is made voluntarily, arises by way of benefaction, and provides no material benefit to the giver. You provide no consideration to any entity for the goods they contribute. The contributions are made voluntarily and arise by way of benefaction. Therefore, the transfer of products to you from entities that manufacture, sell, or exchange such products is a gift for the purposes of subparagraph 38-255(1)(b)(i) of the GST Act. | Detailed Reasoning - Is the 'original character' of the product retained?: As discussed above, a good retains its original character where the dealing does not materially change its composition or functional properties. The activities you undertake do not differ depending on how the products are received. As outlined above, the following activities do not change the original character of a product: (a) perform quality assurance on the product (b) transfer the product to a different container (c) split the product into smaller quantities (d) combine the product with an identical product As noted previously, the following activities do not change the original character of a product: (e) mix it with a different product (f) add an additive to it | Detailed Reasoning - Conclusion on question 3: Therefore, although you are an endorsed charity and receive products as gifts from entities that manufacture, sell, or exchange such products, none of the products you receive from these entities are second-hand goods. Accordingly, your supply of these products cannot be GST-free under subsection 38-255(1) of the GST Act.

Is your supply of a product acquired from a CRC collection bin GST-free under subsection 38-255(1) of the GST Act where you: