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Edited version of private ruling
Authorisation Number: 1011917131782
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Ruling
Subject: goods and services tax (GST) and education courses
Question
Is GST payable by you?
Answer
Yes.
Relevant facts and circumstances
You are registered for GST.
You carry on your business in Australia only.
You are not registered with the relevant authority.
Students are charged and must pay a main fee plus various other fees in return for the training program.
You collect the main fee that is charged to a student for a training program on behalf of the registered entity. You pass on that fee to the registered entity less costs of delivery and costs of sale. You keep part of that fee as remuneration for services you supply to the registered entity.
You send the student records to the registered entity to be managed and reported.
For certified training, you generate a certificate for the student with the registered entity details.
Reasons for decision
Summary
GST is payable by you as you make supplies of teaching services and these supplies satisfy the requirements of section 9-5 of the GST Act.
Detailed reasoning
GST is payable by you where you make a taxable supply.
You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:
You make a taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that
(c) you *carry on; and
(d) the supply is *connected with Australia; and
(e) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free
or *input taxed.
(*Denotes a term defined in section 195-1 of the GST Act)
We consider that you do not supply the training programs to the students; the registered entity instead supplies the training programs to the students; and you supply teaching services to the registered entity, because:
· you collect the main fee that is charged to a student for a training program on behalf of the registered entity
· you pass on that fee to the registered entity less costs of delivery and costs of sale
· you keep part of that fee as remuneration for services you supply to the registered entity; and
· you send the student records to the registered entity to be managed and reported.
Therefore, we cannot advise you whether GST is payable on the supplies of the training programs to the students. The registered entity may apply for rulings on whether GST is payable on the supplies of the training programs.
Tertiary courses
A supply of an education course as defined in the GST Act is GST-free under paragraph 38-85(a) of the GST Act.
Education course includes a tertiary course.
Tertiary courses include courses supplied by the registered entity that are within the scope of the relevant authority registration. Therefore, the supply of such a course is a GST-free supply of an education course.
You make taxable supplies of teaching services
Your supplies of teaching services satisfy all of the requirements of section 9-5 of the GST Act.
That is, you make these supplies for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST. There are no provisions in the GST Act or any other Act under which your supplies of these teaching services are GST-free or input taxed. Therefore, you make taxable supplies of teaching services. Hence, GST is payable on your supplies of teaching services. Your GST liability is equal to 1/11th of the amounts you retain out of student fees.
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