International students - GST Fact Sheet 15

Fact sheet

1. Introduction

There is no specific GST legislation or rulings in respect of Higher Education. However, The GST legislation does provide that some education courses are GST free.

Discussed below are some expenses and the GST implications, which international students may incur whilst studying in Australia.

2. Tuition fees

Any fees charged by RMIT University for an accredited tertiary course are GST free. An accredited tertiary course is one, which is of a kind determined by the Education Minister under subsection 5D(1) of the Students Assistance Act 1973. English language courses for overseas students are also generally GST free.

3. HECS liability

HECS liability only applies to Australian resident students.

4. Studying an extra subject

The AVCC received a ruling dated 6 March 2000, which states:

“Where the student enrols in a single subject which forms a part of a course which leads to the conferring of an eligible tertiary degree, ie a GST free tertiary course, the fee charge in respect of that subject will also be GST free. Where the student merely audits the unit or subject, any fee charged is subject to GST.”

The interpretation of “merely audit” involves the student attending lectures and tutorials etc. without undertaking any assessments involved and is not issued with a certificate acknowledging the studying of the subject. Where this is the case, GST will be charged on the tuition fee to the student.

5. Student fees

Compulsory Non-Academic Fee (CNAF) and Student Services Academic Fee (SSAF) is levied by RMIT University to provide facilities, amenities and activities by the Student Unions and is of direct benefit to the students of RMIT University The CNAF and SSAF is not subject to GST based upon the decision of the RMIT University private ruling from the ATO, Private Ruling Number 8117 dated 29 October 2001.

6. Administrative fees

If the student enrolls in a GST free course, any enrolment (administrative) services provided by RMIT University will also be GST free. These include the processing of enrolments, any examination arrangements, provision of testamurs or transcripts to students, and lecture notes or course guides provided.

7. Penalty for late payment of fees

Any penalties imposed on students by RMIT University, for the late payment of fees Will not incur any GST liability because they are considered to be an administrative service directly related to an education course which is of itself GST free.

8. Other University expenses which students may incur

A summary of the fees and charges that may be incurred by overseas students and its GST treatment are as follows:

Fee charged for GST	status
Enrolment services	GST free
Photocopying by student	Taxable
Printing and laminating for students	Taxable
Examination arrangements	GST free
Internet and E-mail services	Taxable
Counselling services	Taxable
Graduation ceremonies (in Australia)	Taxable
Graduation dinner	Taxable
Hire of academic dress	Taxable
Library charges	GST free
Provision of testamurs and transcripts	GST free
Lecture and course notes and guides	GST free
Recognition of prior learning	GST free

9. Library fines

Library fines imposed by the University will not be taxable under the GST Act ie. there is no GST charged on such fines. The reason for this is similar to that of late payment of fees. Thus, the issuance of a library fine does not attract GST because it does not constitute a supply for GST purposes. Where there is no taxable supply, no GST is payable on such fines.

10. Books and stationary

All stationary purchased by the student will be subject to GST. The sale of textbooks to students will constitute a taxable supply and the RMIT University will accrue a GST liability, even where the textbooks are for a GST free education course.

This is because textbooks are not “necessarily consumed or transformed” and therefore fail the requirements for GST free “course materials”. The GST legislation specifically states that the sale of textbooks will be taxable. However, some textbooks prescribed as recommended reference books for students may allow the student to be entitled to a textbook rebate of 8 %. This rebate allows the students to be at a lesser disadvantage after the GST introduction.

11. Course materials

The sale or provision of “course materials” as defined for a subject undertaken in a GST-free education course is GST-free. To be GST-free, the course materials must be supplied by RMIT University, and the course materials must be necessarily consumed or transformed by the students undertaking the course for the purpose of the course.

The words “necessarily consumed or transformed” means that where materials are used up (i.e. where they cannot be re-used) such as where there are notes, which have places for students to add information, such items would be considered to be necessarily consumed for the purposes of the GST legislation

For example, chemicals used in scientific experiments will be GST-free where they are used as part of the GST-free education course. This is because they are “transformed” and take on a new form. However, equipment sold to students would not be considered as “consumed” or “transformed” and therefore would not receive GST-free treatment.

Course materials may include photocopied educational material, art supplies and ingredients used in a science lecture or cooking class, however would not include textbooks or the hire of equipment such as musical instruments.

12. GST-free only if University sells the course materials

Course materials will only be GST-free if they are supplied by the RMIT University which means that the course materials will be GST-free when supplied to students of RMIT University.

It must be noted that the bookshop at RMIT’s Bundoora campus is not owned or managed by RMIT University. RMIT Union manages it. Therefore, course materials sold at that bookshop, and any other bookshops, which may be situated on campus grounds, will be subject to GST

13. Photocopying charges

The supply of a photocopying card is subject to GST. When a student first purchases a photocopying card, eg. $ 2, there may be two separate values in the photocopy card. The first value is $0.50 for the actual card and the second is for $ 1.50 worth of photocopying credits.

Using the above example, there will be two supplies for GST purposes, the first being the supply of the card itself, and the second being the supply of a future right to photocopy. When a student recharges the photocopy card, eg. 45, there will only be one supply, that of the future right to photocopy.

14. Accommodation rental, food and other living expenses

(a) Accommodation rental – rental of residential premises will be GST free.

(b) Electricity and telephone – charges related to these services will be subject to GST.

(c) Food expenses – basic fresh food purchased from the supermarket, fresh fruit and vegetable stores will not attract GST. Consumption of food at the premises where prepared will result in GST being charged.

(d) Clothing expenses – all purchases of clothing will incur GST, no exemption

(e) Transport – transportation costs such as train, tram and bus travel will incur GST.

(f) Travel – International travel does not incur GST, treated as an export, domestic travel in Australia will incur GST.

(g) Private Health cover – the purchase of private health insurance is GST free.

(h) Visa extensions and working visa costs – first and second installments for student visa applications will be GST free. Extension to the student visa will not be GST free. Working visas were not granted exemption status and are subject GST.

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