GST and Adult and Community Education Courses
If you are a recognised adult and community education (ACE) course provider for the purposes of the GST law, your sales of ACE courses to students are GST-free.
If you are a representative or agent of an ACE course provider, your service of delivering an ACE course is not GST-free.
If you are an independent third party who purchases the right to sell an ACE course to students, your sales of the course to students are not GST-free. The ACE course provider must also pay GST on their sale of the course to you.
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GST-free ACE courses
For an ACE course to be GST-free:
- it must be likely to add to the employment-related skills of its students
- you must be a recognised ACE course provider, delivering the course to students directly or through your employees or representative.
Eligible ACE courses
An ACE course is considered likely to add to the student's employment-related skills if it:
- specifies the employment-related skills participants will acquire in its course objectives
- clearly sets out how participants will learn the skills, before the course begins
- teaches skills reasonably likely to be used at work, or in a business, occupation, profession, or trade, rather than for a hobby or recreation.
The course must not:
- be provided by or for an employer to their employees
- be provided by or for an organisation to their members, except for general community organisations with few restrictions on membership
- be private or individual tuition, and
- be one of the following courses (that are defined separately and may be GST-free in their own right)
- secondary, tertiary, or special education
- an English language course for overseas students
- a professional or trade course
- a first aid or lifesaving course
- a tertiary residential college course.
ACE courses supplied by a recognised provider
You are a recognised ACE course provider if you are:
- a higher education institution
- recognised or funded by a state or territory authority, as a provider of ACE courses
a body corporate operating on a not-for-profit basis having always met and maintained the standards for ACE course providers required by relevant state or territory authorities.
ACE courses delivered by a representative or agent
A recognised ACE course provider may have an agreement or informal arrangement with a representative or agent to deliver an ACE course to students for payment.
The representative’s service to the ACE course provider of delivering a course to students is subject to GST. For GST law purposes, the representative does not supply the ACE course to students. The representative supplies a service for payment to the ACE course provider.
If representatives or agents perform enrolment and/or invoicing activities on-behalf of ACE course providers, it does not change their requirement to pay GST for the service of delivering the course.
ABC TAFE, a recognised ACE course provider, engages XYZ Tuition Pty Ltd to deliver their ACE course.
XYZ Tuition is not a recognised ACE course provider.
XYZ Tuition, as ABC TAFE’s agent, receives a commission of 15 percent of the course fee for its services to ABC TAFE.
The cost of the course is $110.00 (GST-free) per student. A total of twenty students enrol in the course. Ten pay their course fees to ABC TAFE and ten to XYZ Tuition.
Before the start of the course, ABC TAFE and XYZ Tuition exchange details of the total number of students enrolled and the course fees received by each organisation.
ABC TAFE and XYZ Tuition each received a total of $1,100.00 in course fees creating a total of $2,200.00 in sales of the course.
ABC TAFE’s $2,200 in course sales to students is GST-free because they are a recognised ACE course provider.
XYZ Tuition sends ABC TAFE $770.00, from their course fees of $1,100.00 as they have taken out their agreed commission of $330.00.
In this example, XYZ Tuition is ABC TAFE's agent who delivers the course to students on their behalf.
XYZ Tuition’s service to ABC TAFE is taxable and they must pay GST of $30.00 (less any GST credits claimable) on the commission received for delivering the course ($330.00 ÷ 11).
End of example
ACE courses delivered by an independent third party
A recognised ACE course provider may sell the rights to deliver an ACE course to an independent third party to on-sell to students.
The sale may involve, for example, the right of the independent third party to deliver the ACE course for a set period and the seller retaining some rights over the course, such as branding.
This sale is subject to GST because the ACE course provider is selling the rights and materials to deliver an ACE course.
The independent third party’s sale of the ACE course to students is subject to GST because they are not a recognised ACE course provider.
When GST is payable on the sales and delivery of ACE courses.
Byrne College, an ACE provider, developed course content and materials for an ACE course.
Byrne College sells the right to the course content and materials to Jobs For You Pty Ltd for an annual payment over 10 years.
Under the sale agreement, the course retains Byrne College branding and the college sets the course fee.
Jobs For You Pty Ltd does not provide any services to Byrne College. They independently sell and deliver the course to students.
As they are not a recognised ACE course provider, GST is payable on their sales of the course to students.
Byrne College must also pay GST on their sale of the course to Jobs For You Pty Ltd, as they are selling the rights to deliver an ACE course.
End of example