ATO Interpretative Decision
ATO ID 2003/270
Goods and Services Tax
GST and supply of instructing services to a course providerFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 an entity, a supplier of instructing services, making a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when, under a contract with an education course provider, it provides instructing services to the course provider's students?
Decision
No, the entity is not making a GST-free supply under section 38-85 of the GST Act when, under a contract with an education course provider, it provides instructing services to course provider's students.
The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of instructing services. The entity enters into a contract with a course provider to provide instructing services to the course provider's students.
The course provider conducts GST-free professional or trade courses (i.e. a type of GST-free education course under section 38-85 of the GST Act). Students enrol with, and pay fees directly to the course provider. Once a student has completed the course, the course provider is authorised by the relevant State or Territory authority to conduct a test. If a student passes the test, the course provider facilitates the issuing of the qualification/license by the relevant State or Territory authority.
The entity has no contractual relationships with the students.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision:
Section 38-85 of the GST Act provides that a supply of an education course is GST-free.
Therefore, it needs to be determined whether the provision of the entity's instructing services is a GST-free supply of an education course.
The entity enters into a contract with the course provider to provide instructing services to the course provider's students.
However, it is the course provider that is conducting the course. Students enrol with, and pay fees directly to the courser provider. It is the course provider that is authorised to conduct the test and once a student passes a test, it is the course provider who facilitates the issuing of the qualification/license by the relevant State or Territory authority.
Furthermore, the entity itself has no contractual relationship with the students. Therefore, it is the course provider that is supplying the GST-free education course under section 38-85 of the GST Act, not the entity.
The entity is making a separate supply of its services directly to the course provider. The entity is registered for GST and the supply meets the other positive limbs of section 9-5 of the GST Act. The supply is neither GST-free under any other provision in Division 38 of the GST Act nor input taxed under Division 40 of the GST Act.
Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when, under a contract with an education course provider, it provides instructing services to the course provider's students.
- the instructing services are acquired in making taxable or GST-free supplies; and
- the course provider provides, or is liable to provide, consideration for the services; and
- the course provider is registered, or required to be registered.]
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
section 11-5
Division 38
section 38-85
Division 40
ATO ID 2002/1075
Keywords
Goods and services tax
GST free
GST education
Education courses
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 24 February 2003 | Original statement |
| 13 January 2006 | Archived |