ATO Interpretative Decision

ATO ID 2001/353 (Withdrawn)

Goods and Services Tax

• The ATO view for this issue is covered in GSTR 2003/1
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a provider of training courses, making a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act), when it supplies training courses that lead to the issuing of licences to operate machinery, where such a licence is essential to enter a particular trade or profession?

Decision

Yes, the entity is making a GST-free supply under section 38-85 of the GST Act when it supplies training courses that lead to the issuing of licences to operate machinery, where such a licence is essential to enter a particular trade or profession.

Facts

The entity provides training courses which lead to the issuing of licences to operate skid steer loaders, end loaders, backhoes, road rollers, escavators, forklifts and elevating work platforms. The operation of each machine is a prescribed occupation under the relevant State laws.

The relevant State laws require that a person must have the appropriate authority before they can perform work in a prescribed occupation.

The courses the entity provides have no prerequisites and provide the appropriate authority as required by the relevant State laws. The entity is not a Registered Training Organisation (RTO) and operates on a for profit basis.

The training is open to any person wishing to gain qualifications to benefit their employment opportunities and to comply with workplace health and safety requirements.

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

Reasons for Decision

Section 38-85 of the GST Act provides that the supply of an education course is GST-free. The definition of education course in section 195-1 of the GST Act includes professional or trade courses.

Professional or trade courses are defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:

•

for entry to a particular profession or trade in Australia; or

•

to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.

A qualification will be an essential prerequisite under this definition where the course is a legal requirement, for example a law, regulation or industrial agreement, or is a requirement imposed by a professional or trade association, either nationally or on a state basis (section 195-1 of the GST Act). There is no requirement for such a qualification to be supplied by a recognised training provider nor must the provider be an entity that operates on a not for profit basis.

In this case, the courses the entity provides lead to the gaining of qualifications legally required, under the relevant State laws, for entry into or the commencement of an occupation as an operator of skid steer loaders, end loaders, backhoes, road rollers, escavators, forklifts and elevating work platforms.

As the entity is supplying courses that meet the requirements of a professional or trade course (section 195-1 of the GST Act), it is making a GST-free supply of an education course under section 38-85 of the GST Act.

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

Keywords
Goods and services tax
GST Education
Education courses

Business Line:  Goods and Services Tax

Date of publication:  29 September 2001

ISSN: 1445-2782