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Is the entity, a business, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells a capital asset?

Yes, the entity is making a taxable supply under section 9-5 of the GST Act when it sells a capital asset.

The entity is a business. The entity is selling a capital asset in Australia for consideration. The entity is selling this capital asset in the course of an enterprise that it carries on.

The entity is registered for goods and services tax (GST).

Under section 9-5 of the GST Act, an entity makes a taxable supply if: • it makes the supply for consideration; • the supply is made in the course or furtherance of an enterprise that the entity carries on; • the supply is connected with Australia; and • the entity is registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

From the facts above, the entity is registered for GST and is selling the capital asset in Australia, for consideration in the course of an enterprise that it carries on.

Furthermore, the supply is neither GST-free under 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 sells a capital asset.