TAXATION RULING NO. ST 2002

ST 2002

CLEANING CLOTHS CUT FROM SECOND-HAND CLOTHING BY CHARITABLE ORGANISATIONS

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FOI status:

PREAMBLE

In a case recently considered in this office, a public benevolent institution obtained a considerable amount of second-hand clothing etc. Some of the clothing which was not suitable for either resale or supply to needy families was cut into sizes suitable for cloths for industrial cleaning and was, in fact, sold for that purpose.

RULING

2. It has been decided there is no sales tax payable on the rags. Essentially they are second-hand goods and, in any event, the cutting up of the clothing by the public benevolent institution into sizes suitable for cloths for industrial cleaning does not involve manufacture. Such a process may constitute manufacture where it is carried out in an industrial context but in the relatively simple circumstances in which it is carried out by the public benevolent institution, the process is not considered to amount to manufacture.

COMMISSIONER OF TAXATION
15 DECEMBER 1982

References

ATO references:
NO 82/5364 f.2

Date original memo issued:
14.12.82

Subject References:
CHARITABLE ORGANISATION
CLEANING CLOTHS MANUFACTURE
SECOND-HAND CLOTHING

Legislative References:
STAA(1)3