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ATO Interpretative Decision

ATO ID 2005/248

Goods and Services Tax

GST and English language courses for foreign nationals
FOI status: may be released

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, a provider of English language courses, making a GST-free supply of an English language course for overseas students under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies courses to foreign nationals in Australia who enter Australia on a temporary visa that does not contain a 'no study' condition?

Decision

Yes, the entity is making a GST-free supply of an English language course for overseas students under section 38-85 of the GST Act when it supplies courses to foreign nationals in Australia who enter Australia on a temporary visa that does not contain a 'no study' condition.

Facts

The entity is an English language course provider. The entity provides English language courses that consist of classroom tuition, excursions and activities. The entity is accredited and listed on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS).

The entity only provides courses to foreign nationals who are in possession of a student visa or one of various temporary visas (that do not contain a 'no study' clause) issued by the Department of Immigration and Multicultural and Indigenous Affairs. These foreign nationals decide to seek formal English language instruction during their stay.

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

Reasons for Decision

The supply of an education course is GST-free under section 38-85 of the GST Act. The definition of an education course includes, amongst other things, 'an English language course for overseas students'.

An English language course for overseas students is defined in section 195-1 of the GST Act as a course of study or education supplied to overseas students that:

•
includes study or education in the English language, and
•
is supplied by an entity that is accredited to provide such courses by a State or Territory authority responsible for their accreditation.

An overseas student in this context is a foreign national who holds a student visa or another form of temporary visa (excluding a visa that is subject to a 'no study' condition (condition 8207)) and who is enrolled to study in Australia.

The entity only provides courses to foreign nationals whose temporary visas do not contain a 'no study' condition and therefore, the entity is supplying the courses to overseas students.

The entity is supplying the overseas students with tuition in the English language and it is accredited and listed on the CRICOS. Therefore, the entity is making a GST-free supply of an English language course for overseas students under section 38-85 of the GST Act.

Note: A temporary visa is defined in subsection 30(2) of the Migration Act 1958. This subsection provides:
A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a temporary visa, to remain:

(a)
during a specified period
(b)
until a specified event happens, or
(c)
while the holder has a specified status.

Date of decision:  30 August 2005

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 38-85
   section 195-1

Migration Act 1958
   subsection 30(2)

Related Public Rulings (including Determinations)
GSTR 2001/1

ATO Interpretative Decisions overturned by this decision
ATO ID 2004/853

Keywords
Goods and services tax
GST free
GST education
Education courses
English language course for overseas students

Siebel/TDMS Reference Number:  4776683

Business Line:  Indirect Tax

Date of publication:  2 September 2005

ISSN: 1445-2782


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