Edited version of your private ruling

Authorisation Number: 1012353253691

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Ruling

Subject: GST and the supply of adult and community education courses

Question 1

Will your supply of the specified courses be GST-free?

Answer

Yes.

Question 2

Will the supply of the specified courses to students who later withdraw part way through the courses be GST free?

Answer

Yes.

Question 3

Will the supply of single modules from either course offered to individuals be GST free?

Answer

No

Relevant facts and circumstances

You:

§ are registered for GST

§ were approved by the Australian Taxation Office as a non profit entity and granted income tax exemption

§ are not a higher education institution or a body that is recognised or funded by a state or territory authority

§ have not been refused recognition or disqualified by a State or Territory authority as a provider of the courses described in subsection 5(2) on the basis of failing to meet or maintain the standards required by that authority

§ have an informal relationship with, a not-for-profit (social enterprise) entity located in another country which is the originating company of the methodologies taught in your courses. There is no legal relationship between these companies

§ offer courses and other online products to the general public and

§ have been including GST in the charge for all your courses to date.

You have asked about the supply of two courses and their associated modules:

The content of the two courses provides:

§ training in basic principles of the subject matter and

§ teach communication and teaching skills which would enable a student to give others instructions and facilitate classes.

§ the teaching techniques and skills to all students regardless of whether the student is seeking personal development or professional development as a teacher.

You have advised that individuals can enrol in individual modules as standalone subjects and receive a certificate of attendance.

A student qualifies as a teacher once he or she has

§ attended all the course modules,

§ completed all the home study,

§ passed the final teaching assessment and

§ become a full member of the professional Register of teachers.

Course One

This is a program consisting of a number of intensive day modules.

The course is accredited overseas as well as by the Australian body and comprises a number of modules set out in the information you supplied.

Your website provides information on costing for the course.

Course two

The program consists of a number of, day long intensive modules.

There is currently no representative body that accredits these courses however Course two is comparable to other courses in existence in Australia. An Australian teachers association governs the training in Course two by all bodies. You supplied information on the training modules in Course two.

You also supplied information on course fees.

Relevant legislative provisions

Section 7-1 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

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

Reasons for Decisions

Question 1

Subsection 7-1(1) of the GST Act provides that GST is payable on taxable supplies.

The supply of a training course will be taxable if it satisfies all the elements of section 9-5 of the GST Act. Under section 9-5 of the 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.

The facts indicate that your supply of a training course satisfies the requirements under paragraphs 9-5(a), (b), (c) and (d) of the GST Act as the supply is made for consideration, the supply is made in the course or furtherance of your enterprise, the training course is conducted in Australia and you are registered for GST. In addition there is no provision of the GST Act that would make your supply input taxed in your factual situation.

Therefore, your supply of the training courses will be a taxable supply under section 9-5 of the GST Act, unless the supply is GST-free.

Section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999, (the GST Act) provides that:

· a supply of an education course is GST free and

· a supply of any administrative service directly related to the supply of the such a course are GST free if supplied by the supplier of that course.

An education course is defined in section 195 of the GST Act to include amongst other things, an adult and community education course (ACE course). You have asked us to consider whether your course is GST free as an ACE course.

An ACE course is defined in section 195 of the GST Act to mean;

a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and is either

a of a kind determined by the Education Minister to be an adult and community education course or

b is determined to be an adult and community education course and

We will now consider whether your courses meet these requirements.

Are you courses likely to add to the employment related skills of people undertaking the course?

GSTR 2000/27 Goods and Services Tax: adult and community education courses; meaning of likely to add to employment related skills (GSTR 2000/27), provides the ATO view on the term 'likely to add to employment related skills'.

Paragraphs 15 to 17.provides that 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. Where a course meets the following requirements we consider it to meet this test:

1 It is directed at people who want to add to their employment related skills; and.

2 the objectives of the course specify the employment related skills that participants will acquire in undertaking the course; and

3 the means of imparting the skills to the participants are clearly identified prior to the commencement of the course; and

4 there is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours.

5 In addition to the criteria outlined above we also consider:

(i) How the course is marketed.

(ii) Whether the course is similar to an accredited vocational education and training (VET) program.

(iii) The outcomes of the course and evidence that the majority of people undertaking your course are gaining employment relevant to the skills they have acquired in the course; and

(iv) the intended outcome of the course is to develop, increase, advance or improve the employment related skills of the people undertaking the course.

Based on the facts you have provided we find that:

1 your website directs interested people to your teacher training and the benefits for the general public

2 the information you have provided sets out the skills and benefits a participant will gain including employment related skills

3 you have set out the means of imparting the skills to the participants which are identified in your course material

4 although the practice taught is often used in a recreational sense the content of your two courses demonstrate that their purpose is to develop the skill of an individual to enable them to use these skills as a teacher either as an employee, or working in a business, occupation, profession or trade and

5 In addition:

1. your courses are marketed to prospective student teachers

2. you have advised that although your courses are not a VET programme your course is similar to a Vet course offered

3. that a majority of students undertaking the course are taking up teaching and

4. the intended outcome is that the skill level of the participants are increased.

We therefore consider that the courses are of a kind, that are likely to add to the employment related skills of people undertaking the course.

The Education Ministers Determination on ACE courses

The Education Minister issued a determination called the A New Tax System (Goods and Services Tax) (Adult and Community Education courses) Determination 2000. (the Ministers Determination.)

The Ministers Determination deals with part (a) and part (b) of the definition of an ACE course. That is it deals with courses:

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

· courses that are determined to be an adult and community education course.

We will now consider whether your courses fit within either of these two sections of the Ministers Determination.

a) Are your courses a course of a kind determined by the Education Minister to be an ACE course?

The requirements for part (a) of the definition of ACE courses are set out in section 5 of the Determination, to meet all of this section the course of study must be provided by, or on behalf of, a body that;

i. is a higher education institution; or

ii. that is recognised, by a State or Territory authority, as a provider of courses 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 of a kind described in the determination.

Based on the facts provided you do not fall within any of the above categories. Your courses are not courses of a kind determined by the Education Minister to be an adult and community education course.

b) Are your courses determined to be an ACE course under the Education Ministers Determination?

The Ministers Determination provides that when a course meets the criteria set out in section 6 then it is an ACE course. In your case, your courses are:

1. Courses of the kind described in subsection 5(2) of the determination; in that:

i. your courses do not meet the criteria for any other education course defined in section 195 of the GST Act and

ii. are courses that are available to adults in the general community

iii. not provided by or at the request of an organisation to the members of that organisation and

iv. Not be a course that is provided by way of private tuition to an individual

2. Provided by, or on behalf, of a body that:

i. is a body corporate that operates on a not-for-profit basis; and

ii. has not been refused recognition, or disqualified, by a State or Territory authority as a provider of courses of the kind described in subsection 5 (2) on the basis of failing to meet or maintain the standards required by that authority.

And as set out above are courses which are likely to add to the employment related skills of people undertaking the course:

In your case, your courses do not satisfy the definition of any other education courses; they are available to adults in the general community; they are not provided at the request of an employer for an employee or by an organisation for its members. Based on your facts, the courses are not provided by way of private tuition to an individual.

Further to this you are an approved not-for-profit entity, and have not been refused recognition or disqualified as a provider of ACE courses by a State or Territory authority.

It is considered that your courses, meet the criteria set out in the Educations Ministers Determination under section 6, and therefore satisfy the definition of an ACE course and are GST free.

Question 2

Will the supply of your courses to students who later withdraw part way through the courses be GST free?

Where you enrol a student in a course that is:

· of a kind determined by the Education Minister to be an adult and community education course or

· is a course that is determined to be an adult and community education course it will be GST free.

As determined in the previous question the courses meet the requirements of an ACE course. Were a student enrols for the full course it will be GST free, it does not matter that a student withdraws from the course part way through or not.

Question 3

Will single modules from either course offered to individuals be GST free?

Where you offer courses to students that are:

· not likely to add to the employment related skills of people undertaking the course and

· not determined to be an adult and community education course then they will not be GST-free.

Therefore any units, modules or courses that do not meet these criteria will not be GST free.

You have contended that a supply of a single unit or module in a tertiary course is GST-free as per Goods and Services Tax Ruling 2001/01, (TR 2001/01 supplies that are GST-Free for tertiary education courses), and that the supply of a single module from your ACE course should also be GST free on the same basis.

GSTR 2001/1 sets out the ATO view on GST-free tertiary courses. Your courses do not meet the criteria for tertiary courses. In addition the criteria for taking part in units in a Tertiary, Masters or Doctoral course are different to the criteria for ACE courses. We consider that the principles contained in paragraphs 21 to 41 of GSTR 2001/1 do not apply in your factual situation.

This is because underpinning all ACE courses is the requirement that units in the course are likely to add to the employment related skills of the people undertaking the course.

Although a number of your units are structured towards adding to the employment related skills of participants others are generic in nature and therefore cannot by themselves be GST free supplies of education courses as ACE courses under section 38-85 of the GST Act.

The principles contained in GSTR 2000/27 can be applied to determine if the individual units you offer would meet the criteria of an ACE course.

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