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Ruling
Subject: GST and education course
Question 1
Are particular training courses delivered by a Registered Training Organisation (RTO) an 'Adult and Community Education course' (ACE) and therefore not subject to goods and services tax (GST)?
Answer
The training courses delivered by the Registered Training Organisation (RTO) are not an ACE course and therefore are subject to GST.
However, the delivery of the accredited training course is GST-free. Please refer to the additional information provided below in our reasons for decision.
Relevant facts and circumstances
The entity is registered for GST.
The entity is a registered training organisation (RTO).
The entity is not recognised or funded by the relevant State or Territory authority as a provider of audit and community courses
The entity is not a body corporate operating on a not-for-profit basis
The entity provides educational training courses that include accredited and non accredited training courses.
The training courses are available to members of an organisation as well as non-members
Relevant legislative provisions
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.
A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000
Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) Schedule 2
Reasons for decision
Section 38-85 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states that a supply is GST-free if it is a supply of an education course or administrative services directly related to the supply of such a course but only if they are supplied by the supplier of the course.
According to Section 195-1 of the GST Act, an adult and community education course is considered as an education course.
Adult and Community Education Courses
To be GST-free as an adult and community education (ACE) course, a course must be:
i. likely to add to the employment related skills of people undertaking the course; and
ii. of a kind determined by the Education Minister to be an adult and community education course; and
iii. provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis.
First requirement
Goods and Services Tax Ruling GSTR 2000/27 discusses the meaning of 'likely to add to employment related skills'.
Based on the information that was provided, it is accepted that the training courses provided by the entity is likely to add to the employment related skills of the people undertaking them.
Second requirement
To satisfy the definition of an ACE course, the course must also meet the requirements of the Education Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (ACE Determination).
At paragraph 5(2) of the ACE Determination, 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 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.
Based on the information that was provided, it is accepted that the training courses are a kind determined by the Education Minister to be an ACE course. The training courses provided are not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act. The course is available to adults in the general community. The course is available to members or an organisation. However, it is also available to non-members. The course is not provided at the request of an employer to employees of that employer and the course is not provided by way of private tuition.
Third requirement
The course must be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis.
The entity is not recognised or funded as a provider of ACE courses nor a body corporate operating on a not-for-profit basis. As such, the entity does not satisfy the third requirement and the training courses provided do not satisfy all of the requirements of an ACE course, above. Therefore, the supply of the training courses is not GST-free as an ACE course.
Additional Information:
A tertiary course is defined as an education course under section 195-1 of the GST Act and therefore is GST-free.
Schedule 2 of the Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) (Determination 2009/2) provides that an accredited vocational and educational training program (VET) conducted by a registered training organisation (RTO) is a tertiary course.
Goods and Services Tax Ruling GSTR 2001/1 discusses supplies of tertiary courses that are GST-free under Subdivision 38 - C of the GST Act.
Paragraph 37 of GSTR 2001/1 explains that non-accredited units that are not from an approved tertiary course do not satisfy the requirements of the Education Minister's Determination under the Student Assistance Act 1973 because the Determination only covers accredited courses. Non-accredited courses delivered by the entity will be subjected to GST. A copy of GSTR 2001/1 is included with this ruling.
Based on this Determination the accredited course supplied by the entity, would be considered as a tertiary course.
The supply of the non-accredited courses is not GST-free as a tertiary course.
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