ATO Interpretative Decision

ATO ID 2004/2 (Withdrawn)

Goods and Services Tax

• This ATO ID is withdrawn, as it is no longer necessary. The ATO view expressed in this ATO ID is a straight application of the law and does not contain an interpretative decision. Guidance on the view contained in this ATO ID can be found in GSTR 2000/27 Goods and services tax: adult and community education courses; meaning of "likely to add to employment related skills".
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a not-for-profit body corporate, making a GST-free supply of an adult and community education (ACE) course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a course that:

•

is available to unemployed 15 to 17 year olds

•

is widely promoted in the community, and

•

is not subject to any prerequisite for entry?

Decision

Yes, the entity is making a GST-free supply of an ACE course under section 38-85 of the GST Act when it supplies a course that is available to unemployed 15 to 17 year olds, is widely promoted in the community and is not subject to any prerequisite for entry.

Facts

The entity is a not-for-profit body corporate that is registered for goods and services tax (GST).

The entity has not been denied recognition as a provider of ACE courses by the relevant State or Territory authority.

The entity supplies a course that provides training in job search skills. This includes skills in completing a job application, compiling a resume and interview skills. The course is likely to add to employment related skills in accordance with Goods and Services Tax Ruling GSTR 2000/27.

The course is available to persons between the ages of 15 and 17 who are not enrolled in full time education and are seeking employment. There is no prerequisite by way of a necessary level of knowledge or skill, or of completion of prior training, required by participants to undertake and gain benefit from the course.

The course is widely advertised in local papers, on posters or flyers distributed around the district and through a number of community organisations. Participants are enrolled on a 'first come - first served' basis.

The course is presented by way of a series of lectures, tutorials, discussion groups and practical exercises undertaken by participants in groups. It is not presented by way of private tuition for individuals. The course is not provided by or at the request of an employer to their employees, or by an organisation only to its members.

The course is not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act.

Reasons for Decision

The supply of an 'education course' is GST-free under section 38-85 of the GST Act. 'Education course' is defined in section 195-1 of the GST Act to include, amongst other things, an ACE course.

Section 195-1 of the GST Act provides that an ACE course is a course of study or instruction that is:

(i)

likely to add to the employment related skills of people undertaking the course

(ii)

of a kind determined by the Education Minister to be an ACE course,

and

(iii)

provided by, or on behalf of, a body that is:

a higher education institution,

recognised or funded by the relevant State or Territory authority as a provider of ACE courses, or

a body corporate operating on a not-for-profit basis that has not been refused recognition, or disqualified, by a State or Territory authority as a provider of ACE courses.

The entity supplies a course that is likely to add to the employment related skills of participants (in accordance with GSTR 2000/27) and the entity is a not-for-profit body corporate that has not been denied recognition as a provider of adult and community education courses by the relevant State or Territory authority. Therefore, the first and third requirements of an ACE course are satisfied.

The second requirement for an ACE course is that it must be of a kind determined by the Education Minister to be an ACE course. At subsection 5(2) of the A New Tax System (Goods and Services Tax)(Adult and Community Education Courses) Determination 2000 (Educations Minister's Determination), the Education Minister states that an ACE course must:

(a)

not be any other education course defined in section 195-1 of the GST Act

(b)

be available to adults in the general community

(c)

not be provided by or at the request of an employer to employees of that employer

(d)

not be provided by or at the request of an organisation to members of that organisation, except an organisation for which membership is open to adults in the general community, and

(e)

not be a course that is provided by way of private tuition to an individual.

The course is not of a kind mentioned in any other paragraph of the definition of an education course in section 195-1 of the GST Act.

To satisfy the second requirement in the Education Minister's Determination, the entity's course must be available to adults in the general community. The word 'adult' is not defined in the Education Minister's Determination. However, considering the context in which it appears and the purpose of the provision, the Commissioner accepts that the word 'adult' covers a person aged 15 years or over who is not enrolled in full time education. The entity's course is available to persons between the ages of 15 and 17 who are not enrolled in full time education and are seeking employment. Therefore, it is considered that the course is available to 'adults'.

The lack of any entry criteria coupled with the wide scale promotion and advertising of the course, and its availability on a 'first come - first served' basis means that the course is available to adults in the general community.

The course is not provided by or at the request of an employer to their employees, or by an organisation only to its members. The course is not provided by way of private tuition.

As such, the course satisfies the criteria of the Education Minister's Determination and the second requirement of an ACE course is satisfied.

The entity is a not-for profit body corporate that supplies a course that is likely to add to the employment related skills of participants, and does so in circumstance that are in accordance with the Education Minister's Determination. Therefore, the entity is making a GST-free supply of an ACE course under section 38-85 of the GST Act when it supplies a course that is available to unemployed 15 to 17 year olds, is widely promoted in the community and is not subject to any prerequisite for entry.

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

Related Public Rulings (including Determinations)
Goods and Services Tax Ruling GSTR 2000/27

Other References:
A New Tax System (Goods and Services Tax)(Adult and Community Education Courses) Determination 2000

Keywords
Goods and services tax
GST free
GST education
Education courses
Adult & community education course

Siebel/TDMS Reference Number:  1-KP3TNFV;1-MAHUA00

Business Line:  Indirect Tax

Date of publication:  9 January 2004

ISSN: 1445-2782