ATO Interpretative Decision

ATO ID 2001/589 (Withdrawn)

Goods and Services Tax

• This ATO ID is withdrawn on the basis that a precedential view exists. The ATO view for this issue is covered in Goods and Service Tax Ruling GSTR 2003/1
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, the governing body of a sport, 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 provides training courses to accredit judges in the sport?

Decision

No, the entity is not making a GST-free supply under section 38-85 of the GST Act when it provides training courses to accredit judges in the sport. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is the governing body of a sport. The entity provides training courses to accredit judges in the sport.

There is currently no industrial instrument as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997), that applies for the accrediting of people to judge at these particular sporting events. However, the entity has national requirements for accrediting judges in the sport. An individual must be appropriately accredited by the entity to judge at an officially sanctioned event. Accreditation of an individual to become a judge involves attendance at training clinics conducted by senior level judges. However, there is no requirement that an individual must be accredited to judge in this particular sport at an unofficial event.

There is no professional or trade association relating to the accrediting of judges, in this particular sport, in a State or Territory relating to the entry to, or the commencement of the practice of the profession or trade concerned.

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

Under section 38-85 of the GST Act, a supply of an education course is GST-free. The definition of 'education course' in section 195-1 of the GST Act includes a 'professional or trade course'.

•

'Professional or trade course' is 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 (but not to maintain the practice of) a profession or trade in Australia.

A qualification is an 'essential prerequisite' for the purpose of the definition of professional or trade course, if in relation to the entry to a particular profession or trade, the qualification is imposed where:

•

it is by or under an industrial instrument; or

•

if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national registration requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned; by that association; or

•

if neither of the above apply but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned; by that association (as defined in section 195-1 of the GST Act).

'Industrial instrument' is defined in section 195-1 of the GST Act as having the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997). Section 995-1 of the ITAA 1997 defines an 'industrial instrument' to mean:

•

an Australian law; or

•

an award, order, determination or industrial agreement in force under an Australian law.

In this case, there is no industrial instrument covering the accrediting of people to judge at these particular sporting events.

Therefore, it is necessary to determine whether there is a particular professional or trade association that has uniform national requirements relating to the entry to, or commencement of the practice of, the profession or trade concerned.

For a professional or trade association to impose a qualification upon an individual in the particular profession or trade, that association must be able to legally restrict who may and may not practice in that profession or trade. Whilst the entity has uniform national requirements relating to the qualifications that must be held by judges at official events, the entity does not have the authority to impose those requirements on the profession as a whole, as an individual can judge in the particular sport at unofficial events.

In addition, there is no professional or trade association relating to the accrediting of judges, in the particular sport, in a State or Territory relating to the entry to, or the commencement of the practice of the profession or trade concerned. Therefore, the course does not lead to a qualification that is an essential prerequisite for entry into or commencement of a trade or profession. Therefore, the entity is not making a GST-free supply under section 38-85 of the GST Act.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not GST-free under any other provisions 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 it provides training courses to accredit judges in the sport.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   section 38-85
   Division 40
   section 195-1

Keywords
Goods & services tax
GST free
GST education
Education courses

Business Line:  GST

Date of publication:  15 November 2001

ISSN: 1445-2782