Edited version of private ruling

Authorisation Number: 1011497140821

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Ruling

Subject: GST and first aid course

Questions

1. Are you entitled to input tax credits when a registered training organisation (RTO) provides a first aid course to your members?

Answer: No.

You are not entitled to input tax credits when an RTO provides a first aid course to your members. The supply of the first aid course to you is a GST-free supply.

2. Are you making a GST-free supply to your members when you supply them with administrative services in relation to the arranging of a first aid course?

Answer: No.

You are not making a GST-free supply to your members when you supply them with administrative services in relation to the arranging of a first aid course. You are making a taxable supply of the administrative services.

Relevant facts and circumstances

Your ruling is based on the following facts.

You are registered for goods and services tax (GST).

You provide training courses to your members in a wide range of areas to ensure the skills and awareness levels within the industry are maintained and enhanced. Training courses are nationally accredited and delivered by a select network of RTOs. Specific training is provided by recognised industry specialists. You advertise for training courses in your newsletter.

Two of the courses you advertise for are the 'Senior First Aid Certificate Apply First Aid' and the 'Senior First Aid Refresher'. An RTO is the entity who provides these two courses to your members.

The arrangements are:

· You are approached by your members requesting that their employees attend a first aid course.

· You make contact with the RTO to find out when the first aid courses is available.

· You contact your members with a number of available times.

· Your members/member's employees will complete your enrolment form detailing the course they wish to complete and the date and time.

· You contact the RTO and register your members or their employees for the first aid course by providing their names and contact details.

· You are paid by your members the cost of the course plus an additional amount as an administrative fee for your services.

· You give to the RTO the amount for the cost of the course and keep the administrative fee.

· The RTO provides a certificate of attainment to your members/member's employees.

You do not have any written agreements with the RTO for the provision of the first aid courses. The RTO does not give priority to your members, they do not alter the course for your members and they do not run or set up a course solely for your members. You do not have any verbal agreement with the RTO that they will provide the first aid courses to your members.

The RTO is an RTO that is accredited to provide first aid courses.

Reasons for decision

Summary

You are receiving from the RTO a GST-free first aid course. As the supply to you is not a taxable supply you are not entitled to an input tax credit on the acquisition of the first aid course.

Detailed reasoning

Under section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you are entitled to an input tax credit on any creditable acquisition that you make.

Section 11-5 of the GST Act provides that you make a creditable acquisition if:

· you acquire anything solely or partly for a creditable purpose

· the supply of the thing to you is a taxable supply

· you provide, or are liable to provide, consideration for the supply, and

· you are registered or required to be registered for GST.

You are acquiring from the RTO a first aid course. You are acquiring the first aid course in the course or furtherance of an enterprise that you carry on. You provide consideration for the supply and you are registered for GST. Therefore, we need to determine if the supply of the first aid course to you is a taxable supply.

You make a taxable supply under section 9-5 of the GST Act if:

· you make a supply for consideration

· the supply is made in the course or furtherance of an enterprise that you carry on

· the supply is connected with Australia, and

· you are registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

The supply of an education course is GST-free under paragraph 38-85(a) of the GST Act. An education course is defined in section 195-1 of the GST Act to include, amongst other things, a 'tertiary course'.

Tertiary course is defined in section 195-1 of the GST Act to mean:

· a course of study or instruction that is a tertiary course determined by the Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act

· a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-governmental higher education institution, or

· any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act.

Determination No. 2002/1 - Determination of Education Institutions and Courses under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 provides that an RTO is an education institution for the purposes of the GST Act.

Determination No. 2002/1 provides that an accredited vocational education and training (VET) program delivered by an RTO is a tertiary course. The RTO is an RTO that is providing a first aid course that is an accredited VET course. As such, the first aid course in itself has an accredited status as a GST-free tertiary course.

It needs to be considered whether the RTO is supplying the GST-free first aid course to you and whether the GST-free status of the course remains. Goods and Services Tax Ruling GSTR 2001/1 provides information about education courses purchased by employers. It is considered this would equally apply to you as it would to employers. Paragraphs 175 and 176 of GSTR 2001/1 states:

175. The test as to whether GST applies when an employer engages a course provider to deliver an education course to employees is an objective test and would depend on the following criteria:

(a) Terms of engagement

The provider of the course should look at the terms of their engagement and decide whether the engagement is a contract to develop and deliver a customised course or is it a contract to deliver a GST-free course.

(b) The education course

As long as the course retains its accredited status, the supply of the course to the employees at the request of the employer is GST-free.

176. Where the provider modifies the unit or course to suit the needs of the entity, to the point that the course loses its accredited status, the supply of the course will be subject to GST.

The RTO does not develop and deliver a customised course to your members/member's employees. The RTO delivers a first aid course that they are accredited to provide. As such, it is considered the RTO is supplying a GST-free tertiary course to you. Therefore, the RTO is not making a taxable supply to you.

As the supply to you is not a taxable supply, you are not making a creditable acquisition when you acquire the first aid course. Therefore, you are not entitled to input tax credits on the acquisition of the first aid course.

Question 2

It is considered that you are making a supply of administrative services to your members. This includes taking enrolments and organising and arranging for the members/member's employees to attend education courses. We do not consider that you are supplying an education course to your members. You are acquiring a GST-free education course from the RTO and that course is being provided to your members/member's employees.

Therefore, we need to consider whether your supply of administrative services to your members is a GST-free supply. Paragraph 38-85(b) of the GST Act provides that a supply is GST-free if it is a supply of administrative services directly related to the supply of a GST-free education course, but only if they are supplied by the supplier of the course.

You are not supplying the GST-free first aid course. You are acquiring this GST-free course from the RTO and are arranging for your members to attend this course. As such, your supplies of administrative services are not GST-free under paragraph 38-85(b) of the GST Act.

Your supply of administrative services are being made to your members for consideration, in the course or furtherance of an enterprise you carry on, the supply is connected with Australia and you are registered for GST. As such, you are making a taxable supply of administrative services to your members.

Example: If you are acquiring a GST-free education course from the RTO for $110 and you charge your members $11 in administrative services (therefore you collect $121 from your members and pass on $110 to the RTO), you are required to remit 1/11 of the $11 to the Tax Office.

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