Private ruling: GST and scholarship program
Date of advice: 4 September 2018
Published: November 2018

Ruling: Q1: Are you entitled to input tax credits for the consideration you provide in the form of bulk funding to Entity A as per an Agreement in relation to the conduct of certain Programs? | A1: No, you are not entitled to input tax credits for the consideration you provide in the form of bulk funding to Entity A as per the Agreement in relation to the conduct of the certain Programs.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

Reasons for decision: Summary: Section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides you are entitled to an input tax credit for any creditable acquisition that you make. Section 11-5 of the GST Act provides that you make a creditable acquisition if: ● you acquire the thing solely or partly for a creditable purpose ● the supply of the thing to you is a taxable supply ● you provide, or are liable to provide consideration for the supply, and ● you are registered or required to be registered for GST. The question at issue is whether the provision of the bulk funding you provide to Entity A is consideration for a taxable supply that entity makes to you. Entity A does make taxable supplies to you for the services that they provide with operating the program and conducting the assessments and for which you provide consideration in the form of the service fee. However, at issue here is whether the bulk funding is consideration for that or any other taxable supplies. The bulk funding is not consideration for the supply of the services Entity A provides with operating the program and conducting the assessments. It is merely held on your behalf to provide to the host employer. Entity A does not make any supplies to you for which they receive this consideration. As such the bulk funding is not consideration for any taxable supplies made by Entity A and you are not entitled to an input tax credit.