Edited version of your private ruling

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Ruling

Subject: Goods and services tax (GST) and education

Questions

1. Are you making a supply of a GST-free education course when subcontracted under contractual agreements with two registered training organisations (RTOs) to deliver their accredited courses?

Answer:

No, you are not making a supply of a GST-free education course when subcontracted under contractual agreements with two RTOs to deliver their accredited courses. You are making a supply of training, assessment and management services to the RTOs which is a taxable supply.

2. Is the cost charged to the participants for the accredited courses to be delivered under the contractual agreements subject to GST?

Answer:

The cost charged to the participants for the accredited courses to be delivered under the contractual agreements may be GST-free as the supply of an education course being supplied by the RTOs however as the RTOs are not a party to this ruling request, no comment can be made on the appropriate GST treatment of that particular supply.

3. Is the cost payable to the RTOs under the contractual agreements for issuing of the credentials subject to GST?

Answer:

The fee charged by the RTOs for issuing of the credentials to the course participants of the accredited courses under the contractual agreements may be a GST-free supply of an administrative service directly related to the supply of an education course being supplied by the RTOs however as the RTOs are not a party to this ruling request, no comment can be made on the appropriate GST treatment of that particular supply.

4. Are you making a supply of a GST-free education course when you supply the particular unaccredited training course?

Answer:

No, you are not making a supply of a GST-free education course when you supply the particular unaccredited training course. You are making a taxable supply.

Relevant facts and circumstances

You are a training entity registered for GST.

You are not a RTO or an education institution.

You are not a body that is recognised or funded as a provider of adult and community education courses or a body corporate operating on a not-for-profit basis.

You deliver accredited training under agreements with RTOs and non accredited training. Details can be found on your website.

You have a contractual agreement with an RTO to provide them with services on the terms and conditions of the agreement. You have provided a copy of this agreement.

The contractual agreement gives a description of the services and provides that you are to supply training, assessment and management services to achieve the aims and objectives of the respective training delivered in agreement with the RTO including necessary reporting against Australian Quality Training Framework (AQTF).

You are to submit for approval by the RTO, all documentation including course materials, enrolment forms, advertising material and all other documentation required for the purpose of training, assessment and management of courses under the agreement.

You will include a portfolio of evidence being a representative sample of assessments, student records and other materials as described by the AQTF to the RTO for review and acceptance as compliant, whereupon the RTO will issue the credentials to you for presentation to the course participants.

You are required to supply all equipment necessary to provide the services under the agreement.

You are required to take out insurance.

Under the agreement you are also to deliver classes and courses as agreed and scheduled from time to time.

You are to declare all training to be undertaken under the agreement to the RTO.

The RTO will pay the contract fee to you upon receipt of your invoice and satisfactory provision of the services in the relevant period.

The contract fee payable to you for the provision of the services is any fees received for the courses less the cost of issuance of any qualification or statement of attainment.

You are providing the services under the agreement with the RTO as an independent contractor and are not acting as an agent.

You advised that under the agreement you manage the administration of the accredited courses. You find your own participants. You advertise the courses subject to approval, set the course fees, take bookings and payments. The participant will enrol with you and the RTO. You will invoice the participant and manage the debtors within your accounting system.

You manage students, through to your trainer/assessors delivering the training and assessments, and manage this within your database. Once you have delivered the training, you then package the assessments and supplementary paperwork that supports that the delivery of the training has met the national competency standard and as required under your agreement with the RTO.

On receipt of the paperwork and having confirmed the training and assessment meets the AQTF quality standards, credentials are issued by the RTO to you to provide to the successful participants, on payment of a fee.

You are able to retain the fees collected from the students less the cost of the credentials as payment for the services you provided under the agreement.

Under the agreement you have the cost and responsibility of development and maintenance of the training and assessment materials which are subject to approval by the RTO and skills maintenance of the trainer/assessors to the AQTF quality standards.

You also advised that you have another contractual agreement with another RTO to provide them with services on the terms and conditions of the agreement. You have provided a copy of this agreement.

This agreement provides that you are to deliver the services referred to in the agreement. This includes that you are to deliver training and assessment:

· for which permission has been granted to you by the RTO to deliver Nationally Recognised Units/Accredited Courses under the RTO's scope of registration in accordance with AQTF requirements;

· in accordance with any reasonable directions and at locations as instructed by the RTO;

· by completion of induction training;

· if at the RTO's request you deliver services to the RTO's client, the said client shall remain the RTO's client;

· delivering a minimum number of courses per annum.

Furthermore the agreement provides that you agree to:

· liaise with the RTO's staff

· provide timely and detailed planning of training programs and communicate delivery arrangements to the RTO;

· provide trainer qualifications to the RTO;

· participate actively in the monitoring and quality assurance process;

· notify the RTO of concerns, issues or opportunities relating to services provided;

· ensure use of a suitably furnished training room with all necessary facilities and training aids for each course being delivered;

· ensure all training aids are used within your business and not for the delivery of training within other training organisations and that other training organisations cannot access the training materials;

· only undertake the RTO's approved teachings and procedures,

· transfer all required enrolment information, and all other documentation required to the RTO

· employ trainers/assessors with the appropriate level of training and industry qualification; and ensure attendance of trainers/assessors at Professional Development training

· offer for sale the products and publications sold or distributed by the RTO;

· ensure marketing materials for courses delivered under the RTO's scope of registration acknowledge the RTO.

The RTO will provide:

· statements of attainment for competencies achieved in these courses;

· access to training and assessment systems, teaching materials, including lesson plans, presentations, assessment, tools and handouts as relevant per unit or accredited course;

· induction training and annual professional development;

· quarterly newsletters;

· trade discounts for an extensive range of products and publications

· marketing flyer, letter and advertisement samples and access to other marketing resources.

Furthermore the RTO will be responsible for:

· maintaining records of training and assessment delivery, learner results and statements of attainment issued;

· conducting monitoring activities including random examination of learner assessment evidence and site visits to observe training and assessment activities;

· approval of marketing materials for courses being delivered under the RTO's scope of registration.

The agreement provides that you must deliver training in accordance with the RTO's lesson plans, teaching methods and policies, and any regulatory requirements.

Under the agreement you are to pay a once only establishment fee inclusive of GST and then a fee per participant for each course that you run.

Under the agreement you are responsible for the collection of all fees for courses and manage the administration of the accredited courses. You find your own participants. You advertise the courses subject to approval by the RTO, set the course fees, take bookings and payments. You manage students, through to your trainer/assessors delivering the training and assessments and the RTO will issue the credentials.

You are able to retain the fees collected from the students less a fee per participant for each course that you run as payment for the services you provided under the agreement.

When at the RTO's request you have provided services of delivering a class or session the RTO will pay at a rate mutually agreed on receipt of your invoice.

You also provide unaccredited training in a particular course.

This unaccredited training provides the participant with certain skills and knowledge in a particular role.

Training is delivered face to face, either on site or at your premises. The training is delivered in one session of (2) hours at a time to suit the facility, or the majority of the participants.

You have provided a copy of the course flyer. Your course flyer provides the following details about fees:

All fees must be paid before a statement of attendance is issued.

You advised that you advertise the course in your course schedule in various media including your website, take bookings and payments and manage students, through to your trainer/assessors delivering the training and questionnaire, and manage this within your database. You invoice participants and manage the debtors within your accounting system.

As the training is not nationally accredited you do not deliver this under a licence agreement.

On receipt of the paperwork and having confirmed that the training and assessment meets the agreed standards, credentials are issued by you to the successful participants. Costs for credentials under this training are included within the course fees.

Cost of development and maintenance of the training and assessment materials and skills maintenance of the trainer/assessors to the agreed quality standards is your responsibility.

You advised that the relevant unaccredited training provides the participant with certain skills and knowledge in a particular role for people in a number of trades or professions and will enable a person to enter a number of trades or professions.

Your unaccredited training in particular skills is a competence used to both gain initial employment and maintain continuing employment.

You advised that the delivery of your unaccredited training in particular skills has been developed in consultation with industry and a government department and is designed to ensure a particular industry complies with their accreditation standards. This training is required for initial employment and currency must be maintained by employees through their attendance and assessment at retraining every year (proven by reissue of dated credential), with the facility required to keep records of credentials issued to employees and to present as proof of compliance of standards at their annual industry accreditation audit.

You stated that the particular national regulations impose a legal requirement and states that the facility or the nominated supervisor of the facility or the educator of the facility must implement certain and safe practices otherwise there is a penalty.

You stated that it is also a requirement under your particular State law that particular businesses have a certain safety program under a code of standard adopted in Australia otherwise a fine may be imposed. A person in a particular role undertaking your unaccredited training course can show and demonstrate proof of competency.

You have referred to a certain code of standard in Australia which is mandatory in the States and Territories of Australia. This outlines in a clause that the training requirements are that a particular type of business must ensure that persons undertaking or supervising a particular role have the appropriate skills and knowledge in safety and other matters commensurate with their work activities. It is not the intent of this clause to require mandatory training as it is recognized that skills and knowledge may be gained in different ways.

The onus as required under the particular national regulations and your particular State law is on the facility and the particular type of business to ensure that persons undertaking or supervising a particular role have the necessary skills and knowledge competence for the work being performed in certain safety and other matters.

You advised that your unaccredited training course is available to adults in the general community.

You advised that your unaccredited training course may sometimes be delivered at the instigation of the employers to their employees or organisations to their members and explained that participants may enrol as public participants when they are actually undertaking the education as a prerequisite to gaining employment, or the facilities may enrol them as a prerequisite to their prospective employee gaining employment, or the facilities or individuals may enrol for an annual refresher.

The unaccredited training course is not presented as private tuition.

You advised that support is required to be provided to participants who have a physical or other impairment to ensure all participants have the requisite skills and knowledge to perform their duties and is a requirement of the AQTF. You advised that the course content is not modified in any way but the delivery of the course may be modified. You may modify the delivery from a written assessment to an oral assessment for visually impaired participants or from a written assessment to a practical assessment. You advised that it is highly unlikely that the unaccredited training course will be delivered to a child with a disability under the age of 18 years or to a student with a disability regardless of their age but it is possible. You stated that you may deliver to specified youth organisations and it may be possible to deliver to school students.

You advised that you are treating the supply of your unaccredited training course and the accredited courses as a GST-free 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 and

A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.

Reasons for decision

Taxable supply

A supply is subject to GST if it is a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) 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 you ^*carry on; and

(c) the supply is ^*connected with Australia; and

(d) 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 the GST Act)

All the elements of section 9-5 of the GST Act must be satisfied for a supply to be a taxable supply.

Section 38-85 of the GST Act provides:

A supply is GST-free if it is a supply of:

(a) an *education course; or

(b) administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

In your case, you have entered into contractual agreements with RTOs on a subcontract basis to deliver their accredited courses; therefore, we need to determine firstly what supplies are being made under the contractual agreements and who is making the supplies.

Supplies of accredited courses under contractual agreements

Goods and Services Tax Ruling GSTR 2006/9 (which is available from the Australian Taxation Office's (ATO) website at www.ato.gov.au) discusses supplies in tripartite or multi party arrangements. In two party transactions, a thing supplied to an entity is typically also provided to that entity. In more complex arrangements involving more than two entities, which we refer to as tripartite or multi party arrangements, analysis may reveal:

· a supply made to one entity but provided to another entity

· two or more supplies made, or

· a supply made and provided to one entity and third party consideration.

Furthermore, indicators of whether you are the supplier of an education course include who controls:

· the selection of and enrols the students;

· the requirements for course content, accreditation and the issue of any qualification;

· the regulations and procedures for the conduct of the course; and

· the marketing and quality assurance of the course.

You have entered into a contractual agreement with RTOs. Based on the terms and conditions of the respective contractual agreements between you and the respective RTO, it is the RTOs in each contractual agreement that meet all the requirements of the supplier of an education course as listed above notwithstanding that you may enrol the student and provide the physical delivery of their accredited courses. You are not the supplier of an education course.

Based on the contractual agreements between you and the RTOs and applying the ATO view in GSTR 2006/9, there are two supplies being made for GST purposes:

· a supply of services from you as the subcontractor to the respective RTO, and

· a supply from the respective RTO of an education course to the course participants.

In relation to the first supply above, we consider that you as the subcontractor are not supplying an education course but rather are supplying the RTOs with training and assessment services which in turn are provided to the course participants pursuant to the terms and conditions of contractual agreements. The RTOs supply the education course to the course participants that is provided by you.

Therefore, in the contractual agreement between you and one of the RTOs, you are supplying training, assessment and management services to the RTO. The RTO supplies the accredited courses and also supplies qualifications and statements of attainment to the course participants.

In the contractual agreement between you and the other RTO, you are supplying training and assessment services to the other RTO. The other RTO supplies the accredited courses and also supplies statements of attainment to the course participants.

As you are not supplying an education course but rather are supplying the RTOs with training, assessment and management services then this supply is not a GST-free education course, it will be a taxable supply and subject to GST if all of the relevant requirements of section 9-5 of the GST Act are met. In this case, you are making a supply to the RTOs and are receiving consideration whether in the form of an hourly rate or in the form of the retained portion of the course participants fees for that supply, the supply is made in the course of your enterprise that you carry on and is connected with Australia as the supply of the services is made through your enterprise carried on in Australia and you are registered for GST. Furthermore, the supply is not an input taxed supply nor any other GST-free supply under the GST Act. Therefore as all the requirements in section 9-5 of the GST Act are met your supplies of training, assessment and management services to the RTOs are taxable supplies and will be subject to GST.

Please note that the fee charged to the course participants of the accredited courses under the contractual agreements may be GST-free as the supply of an education course being supplied by the RTOs however as the RTOs are not a party to this ruling request, no comment can be made on the appropriate GST treatment of that particular supply.

Furthermore, the fee charged for issuing of the credentials to the course participants of the accredited courses under the contractual agreements may be a GST-free supply of an administrative service directly related to the supply of an education course being supplied by the RTOs however as the RTOs are not a party to this ruling request, no comment can be made on the appropriate GST treatment of that particular supply.

In conclusion, the money from the course fees collected by you that is not passed on to the RTOs under each contractual agreement with them is consideration for a taxable supply of training, assessment and management services by you to the RTOs in the respective agreements. Furthermore if the consideration is in the form of an hourly rate as consideration for the services supplied under the contractual agreements then this will also be a taxable supply and subject to GST. If required by the RTOs you will need to issue tax invoices for the supplies of your training, assessment and management services.

Supply of the particular unaccredited training course

An education course is GST-free under section 38-85 of the GST Act. It is therefore necessary to determine if your supply of the particular unaccredited training course is an education course for GST purposes and whether the supply is GST-free.

Course of education

Based on the information that you have provided, we consider that your supply of the particular unaccredited training course is a course of education as it has elements of systematic instruction, interactive teaching and the assessment of the student's progress.

Types of education courses for GST purposes

An education course is defined in section 195-1 of the GST Act to include:

· a tertiary course;

· an adult and community education course,

· a professional or trade course, or

· a special education course.

Each of the above courses is further defined under section 195-1 of the GST Act.

These are the types of education course from the definition in section 195-1 of the GST Act that could be relevant to your situation.

Tertiary course

Goods and Services Tax Ruling GSTR 2001/1 (also available from the ATO's website at www.ato.gov.au) discusses the definition of tertiary education course for GST purposes.

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

(a) 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; or

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

The Education Minister has made a determination under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act called Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (Determination 2009/2-this is available at www.deewr.gov.au)

Determination No. 2009/2 provides two conditions that must be met and states that a course is a tertiary course for the purposes of the Student Assistance Act 1973 if it is:

· specified in the Determination to be a tertiary course; and

· conducted by an education institution specified for that course.

It is the Minister for Education who will determine, in accordance with Determination 2009/2, whether a course will be a tertiary course. Once a course is determined to be a tertiary course for the purposes of the Student Assistance Act 1973, then the course is a tertiary course for the purposes of the GST Act.

Paragraph 13 of GSTR 2001/1 provides that the types of educational institutions listed in Determination 2009/2 include: a registered training organisation, a higher education institution or any other body approved by the relevant State or Territory to conduct the specified course.

A 'higher education institution' is an institution that was established under Australian Government or State or Territory government legislation as a higher education institution or registered by the relevant State or Territory higher education recognition authority as a higher education institution.

In your case, the particular unaccredited training course is not a type of education course specified in Determination 2009/2. As a result the unaccredited training course that you are supplying is not GST-free as a tertiary course.

Adult and community education course

Goods and Services Tax Ruling GSTR 2000/27 (also available at www.ato.gov.au) discusses adult and community education courses for GST purposes.

Paragraph 10 of GSTR 2000/27 details the definition of an adult and community education course as follows:

10. An adult and community education course is 'a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and:

(a) is of a kind determined by the Education Minister to be an adult and community education course and is provided by, or on behalf of, a body:

(i) that is a higher education institution; or

(ii) that is recognised, by a State or Territory authority, as a provider of course of a kind described in the determination; or

(iii) that is funded by a State or Territory on the basis that it is a provider of courses or a kind described in the determination; or

(b) is determined by the Education Minister to be an adult and community education course.'

Paragraph 11 of GSTR 2000/27 reiterates the three requirements that must be satisfied under the above definition before a course can be treated as a GST-free adult and community education course. It provides that the course:

· must be a course of study or instruction that is likely to add to the employment related skills of people undertaking the course

· must be of a kind determined by the Education Minister in the Determination to be an adult and community education course, and

· must be provided by a body that is either a higher education institution or by a body that is recognised or funded by a State or Territory authority to conduct adult and community education courses as given in the Determination.

First requirement-likely to add to employment related skills

Goods and Services Tax Ruling GSTR 2000/27, discusses the meaning of 'likely to add to employment related skills'. The test as to whether an adult and community education course is likely to add to the employment related skills of people undertaking the course is an objective test and not dependent on the subjective intention of the providers of the course or the recipients.

Second requirement

To satisfy the definition of an adult and community education course, the course must also meet the requirements of the Education Minister's Determination called A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (ACE Determination 2000).

At paragraph 5(2) of the ACE Determination 2000, the Education Minister states that an adult and community education course must:

(a) not be any other education course defined in section 195-1 of the GST Act; and

(b) be available to adults in the general community; and

(c) not be provided by or at the request of an employer to employees of that employer; and

(d) not be provided by or at the request of an organisation to members of that organisation, except an organisation for which membership is open to adults in the general community; and

(e) not be a course that is provided by way of private tuition to an individual.

Third requirement

Finally, the course must be provided by, or on behalf of, a body that is a higher education institution; or that is recognised or funded as a provider of adult and community education courses or a body corporate operating on a not-for-profit basis that has not been refused recognition or disqualified by a state or territory authority as a provider of adult and community education courses for failing to meet or maintain the standards required by that authority.

All three requirements must be met before a course can be treated as a GST-free adult and community education course.

You have advised that sometimes the particular unaccredited training course might be specifically requested by employers to be supplied to their employees and as such, the criteria at paragraph 5(2)(c) above of the second requirement of an ACE course will not be met because the particular unaccredited training course is provided by or at the request of an employer to employees of that employer.

You are not a higher education institution or a body that is recognised or funded as a provider of adult and community education courses or a body corporate operating on a not-for-profit basis. Therefore you do not satisfy the third requirement. There is no need to discuss the other requirements as regardless of whether or not the first and second requirement are met, the third requirement has not been met and therefore the particular unaccredited training course you provide is not GST-free as an adult and community education course.

Professional or trade course

Goods and Services Tax Ruling GSTR 2003/1 (also available at www.ato.gov.au) discusses professional or trade courses for GST purposes.

Paragraph 8 of GSTR 2003/1 details that the definition of a professional or trade course as 'a course that leads to a qualification that is an essential prerequisite:

· for entry to a particular profession or trade in Australia, or

· to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.'

The course will be a professional or trade course if:

· it is a course leading to a qualification; and

· the qualification is an 'essential prerequisite'.

Paragraphs 47 to 49 of GSTR 2003/1 provide that:

47. Under the section 195-1 definition of 'essential prerequisite', the qualification must be imposed:

(iv) by or under an industrial instrument;

(v) if there is no industrial instrument, by a professional or trade association that operates on a national level; or

(vi) if neither (i) nor (ii) applies, by a professional or trade association that operates at a State or Territory level.

48. A qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he or 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.

49. 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.

Paragraph 50 of GSTR 2003/1 provides that an 'industrial instrument means:

(a) an Australian law; or

(b) an award, order, determination or industrial agreement in force under an Australian law.'

Of further relevance to your case are paragraphs 65 to 68 and 96 to 101 of GSTR 2003/1 which state:

A 'particular' profession or trade

65. The reference in paragraph (a) of the definition of a 'professional or trade course' and in the definition of 'essential prerequisite', in section 195-1, to a 'particular profession or trade' establishes a requirement that the qualification be specific to the profession or trade in question.

66. Qualifications that are general in nature and that relate to the entry to, or the commencement of the practice of, a number of professions or trades, are not essential prerequisites for entry to, or to commence the practice of, a particular profession or trade.

67. Courses that you supply for general knowledge, or for personal development, would not ordinarily be professional or trade courses. This is because they lack a sufficiently direct link between the qualification they lead to and the requirement that the qualification be for entry to, or to commence the practice of, a particular profession or trade.

Example 6 - a general qualification

68. To become a taxi driver, under a State law, a person is required to hold a current motor vehicle driver's licence. However, such a licence is obtained to enable a person to drive a motor vehicle generally and is a requirement for many occupations. Doing a driving course to obtain a motor vehicle driver's licence does not lead to a qualification that is an essential prerequisite for entry into a particular profession or trade. The qualification is generic in nature and not for a particular profession. The driving course is not a professional or trade course.

96. There are numerous industrial instruments that require a person to obtain approval or certification before a particular task or duty in an occupation can be undertaken. The fact that there is such a requirement does not necessarily mean that the particular task or duty is a separate profession or trade. If the qualification merely relates to the undertaking of a duty or task in a profession or trade, a course leading to that qualification is not a professional or trade course. The qualification is not an essential prerequisite.

Example 10 - a course that fulfils a legal requirement in relation to a task

97. The Workplace Safety Act of a State requires that a person be appointed as a health and safety officer in a workplace of more than thirty people. Any person, including the employer, may perform this role if he or she is approved to do so. The individual performs their normal duties in the workplace and the role as a safety officer is merely an additional task. The legislation places the obligation on the employer to satisfy this requirement. The legal constraint does not relate to a person entering a profession or trade. A course you run to train a person to perform such a role is not a professional or trade course.

Maintaining the practice of a profession or trade

98. The exclusion in paragraph (b) of the definition of a professional or trade course in section 195-1 ensures that a course which leads to a qualification that is an essential prerequisite to maintaining the practice of a profession or trade, is not a professional or trade course.

99. Maintaining the practice of a profession or trade includes such things as:

· undertaking continuing professional development,

· re-licensing,

· re-accreditation,

· renewal of annual practising certificates, and

· refresher courses.

100. Where your course leads to a qualification that is an essential prerequisite for entry to, or for the commencement of, the practice of a particular profession or trade, and is also a course that may be undertaken for maintenance purposes, the course will still be a professional or trade course.

Example 11 - to maintain the practice of a profession or trade

101. Quickpack Ltd supplies two courses. The first is of 22 hours duration and enables a person to become a baggage handler in the aviation industry. The course content is prescribed by the relevant statutory authority and satisfies the Civil Aviation Regulations 1988 requirement that baggage handlers hold a dangerous goods licence. This course is a professional or trade course. Handlers must complete another course, of eight hours duration, every two years to maintain their licence. Although the eight hour course includes material from the 22 hour course, it is for maintaining employment as a baggage handler. The eight hour course is not a professional or trade course.

As the participants who undertake your particular unaccredited training course receive a statement of attendance upon successful completion it is accepted that your course leads to a qualification. However, your 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.

You advised that the relevant unaccredited training provides the participant with certain skills and knowledge in a particular role for people in a number of trades or professions and will enable a person to enter a number of trades or professions.

Your unaccredited training in particular skills is a competence used to both gain initial employment and maintain continuing employment. The unaccredited training course is delivered annually to particular facilities to maintain their annual accreditation.

You stated that the particular national regulations impose a legal requirement and states that the facility or the nominated supervisor of the facility or the educator of the facility must implement certain and safe practices otherwise there is a penalty. However this legal constraint does not relate to a person entering a profession or trade. Such a requirement to implement certain and safe practices does not necessarily mean that the particular task or duty is a separate profession or trade. Furthermore, this legislation places the obligation on the facility to satisfy this requirement. As such and as explained in paragraphs 49, 96 and 97 of GSTR 2003/1, the particular unaccredited training course is not an essential prerequisite to enter a particular trade or profession in Australia and therefore, is not GST-free as a professional or trade course.

You also advised that a particular business is required to follow your particular State law. The particular State law adopts the code of standards, which set down certain rules.

One of the standards outlines certain responsibilities of particular businesses and specifies the requirements for certain safety programs. A certain safety program is a written document indicating how a particular business will control certain safety hazards.

Another standard sets out specific certain handling controls that must be complied with by particular businesses. People who carry out or who supervise a particular role are required to have the appropriate skills and knowledge in certain safety and other matters. Formal training to satisfy these requirements is not necessary as the skills and knowledge can be acquired through means such as attending training or simply reading provided information. As such, there is no qualification that is an 'essential prerequisite' that is required before an individual can undertake a particular role.

Furthermore, these constraints do not relate to a person entering a profession or trade but rather place the obligation on the particular business to satisfy the requirement of a certain safety program and other controls and ensuring that their people working for them have the appropriate skills and knowledge in certain safety and other matters.

The other issue is whether there is a particular and identifiable profession trade which relates to the particular role. While many professions have the particular role as part of their duties the particular role is not a profession or trade of itself.

As explained in paragraph 66 of GSTR 2003/1, qualifications that are general in nature and that relate to the entry to, or the commencement of the practice of a number of professions or trades are not essential prerequisites for entry to or to commence the practice of a particular profession or trade.

The unaccredited training course is not an essential prerequisite to enter a particular trade or profession in Australia nor does it relate to a specific profession or trade and therefore, is not GST-free as a professional or trade course.

Special education course

Goods and Services Tax Ruling GSTR 2002/1 (also available at www.ato.gov.au) provides a discussion on special education courses.

Paragraph 12 of GSTR 2002/1 details the definition of special education courses as follows:

12. The term special education course is defined in section 195-1. A course meets the requirements of the definition if:

· It is a course of education;

· it provides special programs; and

· the special programs are designed specifically for children with disabilities or students with disabilities (or both).

Paragraph 6 of GSTR 2002/1 provides that a special education course is one designed specifically for children with disabilities, regardless of whether they are students; or students with disabilities, regardless of their age.

Paragraphs 30 and 15 of GSTR 2002/1 state that a child is someone who has not yet attained the age of eighteen. A student is someone who is enrolled, or will enrol, in a course or program of study involving systematic instruction, training or schooling in the areas scholastic and academic pursuits; vocational skills; or personal development. A student can be someone of any age and may be enrolled on a full or part-time basis.

Paragraphs 19 to 21 of GSTR 2002/1 state that:

19. A program is a special program if it is:

· designed specifically to meet the special needs of children or students with disabilities;

· designed specifically to reduce or prevent the impact of disabilities for children or students with disabilities; or

· not made available to people generally.

20. Each and every part of the course of education does not have to be 'special'. However, the program, when looked at in its entirety, needs to be recognised as a special program. For example, the course's content may mirror that of an existing curriculum-based course provided in a school, but be delivered in a way that makes it suitable for children or students with disabilities.

21. In some circumstances, where you modify a program that is not a special program, the modified program may become a special program.

Paragraphs 33 to 34 of GSTR 2002/1 discuss disability and state that:

33. A disability exists where an individual has difficulty in executing activities or has problems in being involved in life situations because some body function or structure is impaired.

34. Children or students with disabilities are those children or students who have a functional or structural impairment that causes them difficulty in executing activities or problems involving life situations. This would include, but is not limited to, conditions that may be diagnosed under the following broad headings:

· learning disabilities/specific learning difficulties (including dyslexia);

· autism spectrum disorder;

· physical disabilities;

· emotional disorders;

· language disorders;

· hearing impairments;

· visual impairments;

· intellectual disabilities.

Furthermore, it is stated at paragraph 35 of GSTR 2002/1 that the special program must, in itself, be a course of education or form part of a course of education. The program is not a special education course if it:

· does not contain elements of a course of education; and

· does not form part of a course of education.

Paragraphs 36 to 37 of GSTR 2002/1 state:

36. For example, a program is not a course of education if it only provides:

· treatment for a medical or physical condition; or

· personal or therapeutic care, support or assistance.

37. However, if such a program is combined with a course of education that is designed specifically for children or students with disabilities, then it forms part of a special education course.

You advised that support is required to be provided to participants who have a physical or other impairment to ensure all participants have the requisite skills and knowledge to perform their duties and is a requirement of the AQTF. You advised that it is highly unlikely that the food hygiene course will be delivered to a child with a disability under the age of 18 years or to a student with a disability regardless of their age.

On the available information that you have provided, we consider that the unaccredited training course is unlikely to be targeted towards children or students with disabilities and as such is not a special program designed specifically for children with disabilities or students with disabilities (or both) and does not fall within the definition of a special education course and is not GST-free under paragraph 38-85(a) of the GST Act.

Conclusion

Your supply of the unaccredited training course does not fall within the definition of:

· a tertiary course,

· an adult and community education course,

· a professional or trade course, or

· a special education course.

· and accordingly, is not a GST-free supply of an education course under paragraph 38-85(a) of the GST Act. The supply will be a taxable supply under section 9-5 of the GST Act where all the requirements of section 9-5 of the GST Act are fully met.

In this case, you are making a supply of the unaccredited training course and are receiving consideration in the form of course participants fees for that supply, the supply is made in the course of your enterprise that you carry on and is connected with Australia as the supply of the course is made through your enterprise carried on in Australia and you are registered for GST. Furthermore, the supply is not an input taxed supply nor any other GST-free supply under the GST Act. Therefore as all the requirements in section 9-5 of the GST Act are met, your supply of the unaccredited training course to the participants is a taxable supply and will be subject to GST.

Correcting GST mistakes

If you have mistakenly treated and classified a taxable supply as not subject to GST, you will need to revise your previous BAS, or in some cases where you come within the specified time and correction limits you may be able to make a correction on a later BAS.

The ATO has issued a fact sheet about correcting GST mistakes which outlines when you may make a correction on a later BAS in relation to previous tax periods. This fact sheet titled Correcting GST Mistakes (NAT 4700) sets out the time and correction limits. A copy of this fact sheet is accessible from our website at www.ato.gov,au

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