ATO Interpretative Decision
ATO ID 2004/119
Goods and Services Tax
GST and assessment of prior learning for access to informal on-the-job trainingFOI status: may be released
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 training organisation, 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 determining the type of informal on-the-job training that person will require?
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 determining the type of informal on-the-job training that person will require.
Facts
The entity is a training organisation. The entity provides assessing services. The entity 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.
The entity supplies a service of either assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills.
The assessment is for the purpose of determining what informal on-the-job training that person will require.
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.
The entity supplies a service of either assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills. The entity's assessment is for the purpose of determining the type of informal on-the-job training that person will require. The GST Act does not define the word 'education', therefore it will take its ordinary meaning. The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales defines 'education':
1. the act or process of educating; the imparting or acquisition of knowledge, skill, etc.; systematic instruction or training. 2. the result produced by instruction, training, or study...
Informal on the job training involves the imparting or acquisition of knowledge and skill and accordingly comes within the meaning of education. As such, the entity's supply is for the purpose of access to education and the 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:
- •
- a professional or trade association
- •
- 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
- •
- an authority of the Commonwealth or of a State or Territory, or
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- a local government body.
The entity 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. Therefore, the entity's supply is not excluded from being GST-free under subsection 38-110(2) of the GST Act.
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 determining the type of informal on-the-job training that person will require.
Note: A list of the State or Territory training recognition authorities is available from the National Training Information Service (NTIS) website.
Date of decision: 11 November 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 38-110
subsection 38-110(1)
subsection 38-110(2)
Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales
Keywords
Goods and services tax
GST free
GST education
Recognition of prior learning
ISSN: 1445-2782
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