Edited version of private ruling

Authorisation Number: 1011475346058

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Ruling

Subject: Training course

Question: Is the supply of your training course a GST-free supply?

Answer: No, the supply of your training course is not a GST-free supply.

Relevant facts and circumstances

Your business is a consulting and training company

· You provide a range of training courses for individuals to assist them to meet mandatory requirements or improve their knowledge and skills to improve their business operations.

· Many of your training courses are provided to individual staff either within a particular industry, or those seeking to gain qualifications to the industry.

· The course may also be completed by anyone in a supervisory or management position

· Other staff that can benefit from doing the course are: assistant managers, supervisors, trainee managers and interested senior staff members.

· You are a registered training organisation (RTO)

· The course is not one of your accredited courses.

You have advised that the State Parliament has passed new laws effective from 1 January 2009 to become an Approved Manager of a licensed venue an applicant must provide proof of achievement of a Responsible Service of Alcohol (RSA) certificate and a Responsible Management of Licensed Venues (RMLV) certificate.

The RMLV is a two day training course which focuses on the liquor laws and best practices in venue management including:

· The legal framework

· Licenses and permits

· The license document

· Risk management

· Best practice management

· Networks to support management

· Noise management strategies

· Safety management strategies

· Other legislative considerations

· Benefit of good management

· Patron management strategies

· Responsible service of alcohol - the law.

The new law affects all applications for new licenses, transfers of license or a change of nominee. Applicants will have to attend the licensees training course if they either:

· Have not completed the course in the last three years or

· Have not held the same type of licence within the last three years

Reasons for decision

These reasons for decision accompany the Notice of private ruling for an entity.

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

The supply of an education course is GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Paragraph (j) of the definition of education course in section 195-1 of GST Act includes a professional or trade course.

A professional or trade course is defined in section 195-1 of the GST Act as a course leading to a qualification that is an essential prerequisite:

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

(b)   to commence the practice of (but not to maintain the practice

of) a profession or trade in Australia.

 Is the supply of the RMLV a supply of a course?

The view of the Commissioner on what constitutes a supply of a course in the context of a professional or trade course, are contained in GSTR 2003/1. The structure and delivery of the RMLV, together with the systematic instruction, assessment and examination of competency would indicate that the RMLV is a course for the purposes of the GST Act.

Does the undertaking of the RMLV lead to a qualification?

Paragraphs 42 to 45 of GSTR 2003/1 examine what constitutes a qualification or evidence of a qualification in the context of a professional or trade course. Paragraph 45 of GSTR 2003/1 has been reproduced below:

45. Documents that are qualifications or that provide evidence of a qualification include:

· a statement of satisfactory completion;

· a certificate (including a degree or diploma);

· a licence; or

· an accreditation.

 Is the qualification an essential prerequisite?

Paragraph 46 of GSTR 2003/1 explains that a course will only be a professional or trade course if it leads to a qualification that is an essential prerequisite for entry to, or to commence the practice of, a particular profession or trade.

Paragraph 48 of GSTR 2003/1 states that a qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he/she can enter into, or commence the practice of, a particular profession or trade. This necessarily requires the imposition of penalties or sanctions if a person enters into, or commences the practice of, the profession or trade without the relevant qualification.

Paragraph 49 of GSTR 2003/1 further states that a qualification that is imposed for reasons other than for entry to, or to commence the practice of, a profession or trade, is not an essential prerequisite for the purposes of a professional or trade course. Similarly, a qualification required by an employer or group of employers, but which is not imposed by an industrial instrument, or a professional or trade association at either the national level, or State or Territory level will not be an essential prerequisite.

Paragraphs 85 to 91 of GSTR 2003/1 provide some guidance on the terms profession and trade.

What is a profession?

85.  Profession is not a defined term in the GST Act so it takes its ordinary meaning. The meaning of the term profession has altered over time, primarily in line with changing community perceptions.

86.  In Robbins Herbal Institute v. Federal Commissioner of Taxation (1924) 32 CLR 457, (Robbins) Starke J provided a definition of the word profession which we consider is appropriate in considering the definition of a professional or trade course. He said:

The word [profession] implies, as is pointed out in the Century Dictionary, professed attainments in special knowledge as distinguished from mere skill, knowledge which is to be acquired only after patient study and application (see United States v. Laws ). Thus many vocations may fall within the accepted and ordinary use of the word. But whether a person in any given case carries on a profession is a question of degree and always of fact (Cecil v Commissioners of Inland Revenue ,Currie v.Commissioners of Inland Revenue.

87.  We agree with the view stated in Robbins. The term profession should not be confined to the traditional meaning of the word, and therefore is not limited to the medical, legal, theological and military professions. Whether an individual occupation is a profession will depend on the facts in each case.

  What is a trade?

88.  Trade has a wide meaning involving recognition of a category or body of practical vocational skills of some difficulty and some generality.

89.  A number of cases have dealt with the word trade for immigration purposes. In Ranatora v. Minister for Immigration and Multicultural Affairs (1998) 154 ALR 693, Hill J reviewed several decisions and said:

An occupation may be a trade notwithstanding the absence of formal training and notwithstanding the absence of anything akin to apprenticeship. An occupation will be a trade if it involves skilled handicraft (there is no implication as such of manual labour in the use of this expression) or perhaps as Sackville J referred to a skilled calling.

90.  The word trade is applicable to any skilled handicraft. It includes the operation of particular pieces of equipment or machinery.

91.  Whether the operation of a particular piece of equipment is considered a trade will depend on facts such as the type of equipment and the particular skills required for operating the equipment.

An 'Approved Manager' is not a profession or trade. The profession or trade is that of hospitality worker (e.g. bar/café/restaurant/hotel/nightclub staff member). The role of the manager is not that of a separate profession or trade, but that of a bar/café/restaurant/hotel/nightclub staff member with supervisory responsibilities.

The Liquor Act 1992 places an obligation on licensees to be on site or reasonably available during a licensed venue's trading hours. If a licensee is not available, the Liquor Act 1992 states that an Approved Manager must be on site or reasonably available in the place of the licensee. The Approved Manager is not required by the law to have additional skills to enter a separate profession or trade, but to hold a certificate that recognises their suitability to take on the responsibilities of the licensee. The RMLV is simply a certification that must be obtained before a person can perform a particular task or duty (i.e. to stand in for the licensee) at a licensed venue.

Accordingly, the supply of the RMLV course by you is not GST-free as a supply of a professional or trade course under section 38-85 of the GST Act.

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