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Is the entity, a non-government secondary education institution, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it provides a scholarship that covers secondary tuition, boarding school accommodation and music tuition to a student?

No, the entity is not making a taxable supply under section 9-5 of the GST Act when it provides a scholarship that covers secondary tuition, boarding school accommodation and music tuition to a student. The entity is not making a supply for consideration.

The entity is a non-government secondary education institution. The entity provides a scholarship to a student.

This scholarship entitles the student to: • tuition, for which the school normally charges a fee to students • accommodation in the school's boarding facilities, and • tuition for music (not a part of the school's curriculum).

The student does not provide any consideration for the tuition or accommodation.

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

Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply. Under paragraph 9-5(a) of the GST Act, the supply made by an entity must be for consideration. 'Consideration' is defined in section 9-15 of the GST Act to include any payment, act or forbearance, in connection with, in response to or for the inducement of a supply of anything.

The entity is providing a scholarship to the student and the student does not provide any consideration in return for the scholarship. Therefore, the entity is not making a supply for consideration and the requirement in paragraph 9-5(a) of the GST Act is not met.

Accordingly, the entity is not making a taxable supply under section 9-5 of the GST Act when it provides a scholarship that covers secondary tuition, boarding school accommodation and music tuition to a student.