Issue
Is the entity, a sole trader, 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 personal asset?
Decision
No, the entity is not making a taxable supply under section 9-5 of the GST Act when it sells a personal asset.
Facts
The entity is a sole trader that supplies goods. The entity sells a personal asset. The personal asset was only used for private purposes and was never used for business purposes. The personal asset never formed part of the assets of the business and was not shown in the accounts of the business.
The entity's supply of the goods is connected with Australia. The entity is registered for goods and services tax (GST).
Reasons for Decision
Under section 9-5 of the GST Act an entity makes a taxable supply if: • the entity makes a 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.
The entity is registered for GST, is making a supply that is for consideration and the supply is connected with Australia. However, as the private asset is a personal asset and never used for business purposes, the sale is not in the course or furtherance of an enterprise that the entity carries on.
Therefore, as the entity's supply does not meet all the requirements of section 9-5 of the GST Act, the entity is not making a taxable supply when it sells a personal asset.