Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private ruling

Authorisation Number: 1011587321718

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: GST and supply of an education course

Question: Is the supply of the following training courses a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999(GST Act)?

Answer: Yes. The supply of the following training courses is a GST-free supply under section 38-85 of the GST Act.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

· You carry on a business as a driving school .

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

Reasons for decision

These reasons for decision accompany the Notice of private ruling.

The supply of an education course is GST-free under section 38-85 of the GST Act. Paragraph (j) of the definition of education course in section 195-1 of the GST Act includes a professional or trade course.

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

For the purposes of the definition of a professional or trade course, the term 'essential prerequisite' is defined in section 195-1 of the GST Act in the following terms:

a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed [among other things]:

The term industrial instrument is defined in section 195-1 of the GST Act as having the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) which states:

industrial instrument means:

 In your case, it needs to be determined whether:

Goods and Services Tax Ruling GSTR 2003/1, Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1), provides guidance on supplies that are GST-free as professional or trade courses. In particular GSTR 2003/1 considers what is meant by the following terms: course, leads to a qualification, essential pre-requisite and industrial instrument.

Course

Paragraph 22 of GSTR 2003/1 states:

The details of the training show that the heavy vehicle driver training that you provide to students is a program of systematic and interactive instruction for the acquisition of the particular skills of driving heavy vehicles. The heavy vehicle driver training is a course for the purposes of the definition of a professional or trade course in section 195-1.

Leads to a qualification

Paragraph 44 of GSTR 2003/1 states in respect of when a licence is a qualification:

In your case, the qualification is the heavy vehicle driver licence that is issued by the local State Transport authority to students who have passed the assessments. The heavy vehicle driver licence is a qualification for the purposes of the definition of a professional or trade course in section 195-1. Although you do not issue the licence, the heavy vehicle driver training that you provide to students leads to the heavy vehicle driver licence being issued. There is a sufficiently direct and demonstrable connection between the heavy vehicle driver training that you provide and the heavy vehicle driver licence issued to students who have passed the assessments.

Qualification is an essential prerequisite imposed by or under an industrial instrument

 Under the section 195-1 definition of essential prerequisite, the qualification must be imposed, among other things, by or under an industrial instrument.

 Paragraph 48 of GSTR 2003/1 states:

You have advised that under State law it is mandatory for a person to hold a particular driver's licence before they can enter or commence the relevant driving occupation.

In your case, the heavy vehicle driver licence issued is a qualification that is imposed by or under an industrial instrument, that being, the State laws referred to above. The heavy vehicle driver licence is a qualification that is an essential prerequisite as it is mandatory for persons to hold heavy vehicle driver licences before they are legally entitled to drive heavy vehicles on public roads in the State.

Qualification is an essential prerequisite in respect of a particular profession or trade

Paragraph 65 of GSTR 2003/1 provides that, as the definition of a professional or trade course in section 195-1 refers to a particular profession or trade, there is a requirement that the qualification be specific to the profession or trade in question.

 Paragraphs 90 of GSTR 2003/1 states in respect of a trade:

The driving of a heavy vehicle is a skilled handicraft and involves the operation of a particular piece of equipment or machinery, that being, the heavy vehicle. You provide training in driving heavy vehicles of varying sizes and complexity, from an 8 tonne truck to a road train.

Different levels of skill are required to drive the different types of vehicle. This is why a specific licence is required and can be obtained only after training and testing in a vehicle representative of the class of vehicle authorised to be driven under the particular class of licence.

The driving of each of these types of heavy vehicle is considered to be a trade for the purposes of the definition of a professional or trade course in section 195-1 of the GST Act. The particular heavy vehicle driver licence is a qualification that is an essential prerequisite for the entry to, or to commence the practice of, a particular trade, that being, the driving of the various types of heavy vehicles, in Australia.

Conclusion:

Your supply of the four heavy vehicle driver training courses referred to in your letter is a professional or trade course within the meaning given in section 195-1 of the GST Act. The supply of these heavy vehicle driver training courses is a GST-free supply of an education course under section 38-85 of the GST Act.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).