ATO Interpretative Decision
ATO ID 2004/45
Goods and Services Tax
GST and assessment of prior learning for the purpose gaining a promotionFOI status: may be released
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 trade association, making a GST-free supply under section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it assesses the qualifications of a person for the purpose of that person gaining a promotion?
Decision
Yes, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of a person for the purpose of that person gaining a promotion.
Facts
The entity is a trade association. The entity supplies a service of assessing the qualifications held by a person for the purpose of that person gaining a promotion.
The entity conducts a test of that person's knowledge and skills and may also issue a qualification based on that test.
The entity is registered for goods and services tax (GST).
Reasons for Decision
A supply is GST-free under subsection 38-110(1) of the GST Act when the supply is the assessment or issue of qualifications for the purpose of:
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- access to education
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- membership of a professional or trade association
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- registration or licensing for a particular occupation, or
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- employment.
An assessment or issue of qualifications for the purpose of employment encompasses assessment or issue of qualifications for any aspect of employment, including obtaining, retaining, advancement within or changing employment.
The entity's supply of assessing the qualifications of a person is for the purpose of that person gaining a promotion. A promotion is advancement within employment and, as such, the entity is making an assessment that is for a purpose of employment. Therefore, the entity's supply satisfies the requirements in subsection 38-110(1) of the GST Act.
However, subsection 38-110(2) of the GST Act provides that a supply is not GST-free under subsection 38-110(1) of the GST Act unless the supply is carried out by:
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- a professional or trade association
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- an education institution
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- an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services
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- as authority of the Commonwealth or of a State or Territory, or
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- a local government body.
The entity is a trade association. Therefore, the entity's supply is not excluded from being GST-free.
Accordingly, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of a person for the purpose of that person getting a promotion.
Date of decision: 14 January 2004
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 38-110
subsection 38-110(1)
subsection 38-110(2)
Keywords
Goods and services tax
GST free
GST education
Recognition of prior learning
ISSN: 1445-2782