Edited version of private ruling

Authorisation Number: 1011616144556

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Ruling

Subject: GST and education courses

Question 1

Were you making a supply of a GST-free education course?

Answer: Yes.

Question 2

Were you making a supply of a GST-free education course to students who partially completed the courses and received credit for units completed?

Answer: Yes.

Relevant facts and circumstances

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

You were a Registered Training Organisation (RTO) delivering nationally accredited qualifications.

You were registered and accredited as an RTO to deliver the courses as part of your registration.

The courses you provide are accredited as vocational education and training courses.

Students complete the course or do part of the course.

Students will receive credits for the units they have completed and these credits are accepted when they re-enrol to complete the course.

The courses are available to other students within Australia and also available through other education institutions.

The internet provides the names of schools that provide the courses.

You treated the supply of the courses as a taxable supply and remitted the GST made on the supply to the Australian Taxation Office (ATO).

You continue to provide the courses and treat the supply of the courses as a taxable supply.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

A New Tax System (Goods and Services Tax) Act 1999 Section 38-85

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-85(a)

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-85(b)

Reasons for decision

Question 1

Were you making a supply of a GST-free education course?

Summary

The accredited courses you provided are GST-free education courses.

Detailed reasoning

Under section 9-5 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act), you make a taxable supply if:

· you make the 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.

A supply of an education course is GST-free under section 38-85 of the GST Act. The definition of an education course is defined in section 195-1 of the GST Act and includes amongst other things, a tertiary course.

Tertiary course

Tertiary course is defined in section 195-1 of the GST Act and includes a course of study or instruction that is a tertiary course determined by the Education Minister under subsection 5(D)1 of the Student Assistance Act 1973.

The ATO view on GST-free tertiary courses is provided in the Goods and Services Tax Ruling (GSTR) 2001/1.

Paragraph 14 of GSTR 2001/1 provides that in determining whether an education course is an approved tertiary course, it does not matter to whom the course is delivered. For example, an education course specified as an approved tertiary course under the Education Minister's determination will be GST-free regardless if it is delivered to resident students or non-resident students studying in Australia.

Further, paragraph 15 of GSTR 2001/1 provides that a course provided under contract that is specifically designed for non-resident students and is not available to resident students is not an approved tertiary course under the Education Minister's determination.

Education Minister's Determination

The Education Minister has determined under the "Determination of Education Institutions and Courses under subsections 3(1) and 5D(1) of the Student Assistance Act 1973" (Determination No.2002/1) that an accredited Vocational Education and Training (VET) program conducted by an RTO is a tertiary course.

Definitions of both RTO and VET are provided in Determination No.2002/1 as follows:

RTO is defined in subparagraph 5(2)(a) of the Determination 2002/1 and states:

a "registered training organisation", being an organisation that is registered by the relevant State or Territory training recognition authority in accordance with the Australian Quality Training Framework to provide one or more vocational education and training programmes

A VET program is defined in paragraph 4 of the Determination No. 2002/1 as:

(a) an accredited vocational education and training course; or

(b) a sequence of training consisting of one or more subjects or modules where each subject or module is from an accredited vocational education and training course; or

(c) a structured approach to the development and attainment of competencies for a particular Australian Qualification Framework qualification specified in an endorsed training package.

Consequently, for the purposes of the GST Act, a VET program delivered by an RTO is a tertiary course and is GST-free under section 38-85 of the GST Act.

In your case:

· the courses are accredited VET courses,

· you were registered and accredited as an RTO to deliver the courses as part of your registration, and

· you provided the accredited VET courses.

Therefore, for the period that you were registered as an RTO, the provision of those accredited courses by you are GST-free as education courses under section 38-85 of the GST Act. Any fees that are charged for tuition, facilities and other curriculum related activities associated with those courses are also GST-free.

Question 2

Were you making a supply of a GST-free education course to students who partially completed the courses and received credit for units completed?

Summary

The accredited courses you provided which were partially completed are GST-free education courses.

Detailed reasoning

The ATO view concerning the situation where an educational institution supplies a unit or unit of an accredited course that falls within the scope of registration as an RTO is discussed in Goods and Services Tax Ruling (GSTR 2001/1) - Supplies that are GST-free for tertiary education courses at paragraphs 23 to 28 (with examples provided at paragraphs 29 to 36).

GSTR 2001/1 states:

Single units

23. A tertiary, Masters or Doctoral course generally consists of component parts that are commonly referred to as 'subject', 'course', 'module', 'unit' or 'program'. The term 'unit' will be used throughout this Ruling, but has the same meaning as subject, module, course or program.

24. Where you supply one unit of a tertiary course that is covered by the Education Minister's determination and the recipient is enrolled in that unit, the supply of that unit is GST-free.

25. A student is enrolled if his or her personal details are incorporated in the institution's normal student recording mechanism.

26. Similarly, you may supply one or more units of a Masters or Doctoral course that is accredited at a Masters or Doctoral level. Any fee charged, to a student enrolled to undertake one or more of these accredited units, is also GST-free.

27. Some Doctoral courses may or may not contain 'units' as previously discussed. For example, a Doctorate of Philosophy (PhD) that normally takes 3 years or more to complete, will often be a single course of study with no 'units' and this will be GST-free. However, some PhD courses contain components that would be considered to be units and these may also be supplied on a GST-free basis.

28. Sometimes a student enrols in a unit and elects not to be assessed. This is often referred to as 'auditing' a unit. Provided the student is enrolled to undertake a unit that forms part of an approved tertiary course covered by the Education Minister's determination the fee charged is GST-free.

Therefore, single units or subjects of an accredited tertiary course covered by the Education Minister's determination supplied by an RTO within the scope of its accreditation are GST-free.

Accordingly, when you supplied single units of the courses to recipients enrolled in those units, the supply of those single units are GST-free.

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