Edited version of your private ruling

Authorisation Number: 1012446541846

Ruling

Subject: Supply of educational courses

Questions

1. Is the supply of the courses listed in Table 1 GST-free?

2. Is the course listed in Table 2 GST-free?

3. Is the supply of the courses listed in Table 3 taxable?

Decisions

1. Yes, the supply of the courses listed in Table 1 is GST-free.

2. Yes, the supply of the course listed in Table 2 is GST-free.

3. Yes, the supply of the courses listed in Table 3 is taxable.

This ruling applies for the following periods:

N/A.

The scheme commences on:

N/A

Relevant facts and circumstances

In your submission to us, you provided the following information as facts applicable to your application for a private ruling:

· You are carrying on an enterprise and are registered for the goods and services tax (GST).

· You were previously known by another name.

· You are a wholly owned company of an industrial chamber.

· You provide education and training courses, some of which you supply as GST-free based on a private ruling issued by the Australian Taxation Office (ATO) previously to you under your previously known name.

· You are a registered training organisation (RTO) and you deliver a mixture of accredited and non-accredited courses.

· The "accredited" courses you deliver are formally reviewed and endorsed by the relevant state vocational education and training authority.

· This State government authority was established under the Vocational Education and Training Act (1996).

· The accredited courses you deliver are for apprenticeships, traineeships, and trade related ones.

· These courses satisfy the criteria for GST-free status as they are educational programs recognised by the relevant state accreditation authority and are essential prerequisites for entry into trade and occupational areas in manufacturing, engineering, wholesale and retail sectors.

· Table 1 shows the list of courses that fall within the definition of a trade or a professional program, all of which are formal apprenticeship or traineeship programs that were deemed GST-free by the previous ruling issued to CCI.

· You also deliver accredited courses developed in association with industry which fall within the definition of adult and community education. These are listed in Table 2.

· These courses are accepted by the Federal Minister for Education as providing essential employment related skills.

· These courses are also part of your accredited course list and are recognised as employment related as well as recognised by relevant state vocational education and training authority and add to the employment related skills of the course participants.

· In Table 3 are the remaining courses delivered by you and which are not accredited by the relevant state vocational education and training authority.

· The participants in these courses are sent by their employers with the expectation that they will return with additional employment related skills.

· Since the original ruling issued to you under your previous name, the course structure of these courses have changed, but where a course is accredited by relevant state vocational education and training authority, such accreditation continued to be in force.

Relevant legislative provisions

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

Reasons for decision

Subdivision 38-C of the GST Act deals with education and section 38-85, which is reproduced below, deals specifically with education courses. 

38-85 Education courses

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

(a) an education course; or

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

Division 195 of the GST Act provides further definitions, in relation to "education courses" and the relevant sections which need to be considered. Under section 195-1 of the GST Act, an "education course" means, among others,

· an adult and community education course

· a professional or trade course.

An "adult and community education course" means, according to the same section of the GST Act, 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 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 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; or

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

A "professional or trade course" means, under section 195-1 of the GST Act, a course leading to qualification that is an essential prerequisite:

(a) for entry to a particular profession or trade in Australia; or

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

"Essential prerequisite" is defined in section 195-1 of the GST Act as a qualification in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed:

(a) by or under an industrial instrument; or

(b) if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or

(c) if neither paragraph (a) nor (b) applies but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association.

In this case there are three different types of courses you supply for which you wish to determine the GST status. These are listed separately in Tables 1 to 3.

Courses in Table 1

You are a registered training organisation (RTO) and you informed us that the courses you deliver, which are listed in Table 1, are formally reviewed and endorsed by the relevant state vocational education and training authority. Further, the relevant state vocational education and training authority is a government authority established under the Vocational Education and Training Act (1996). These courses are for apprenticeships, traineeships, and trade related ones and therefore fall within the definition of professional or trade courses. Furthermore, you informed us that the courses are educational programs recognised by the relevant State accreditation authority and are essential prerequisites for entry into trade and occupational areas in manufacturing, engineering, wholesale and retail sectors.

Although the course structure of some of these courses may have changed over time, you stated that they still retain their appropriate accreditation.

Based on the information you provided, these courses are GST-free.

Courses in Table 2

There is one course listed in Table 2. You informed us that this course is accepted by the Federal Minister for Education as providing essential employment related skills. According to you, the course is also part of your accredited course list and is recognised as employment related as well as recognised by the relevant state vocational education and training authority and adds to the employment related skills of the course participants. Therefore, this course is GST-free.

Courses in Table 3.

You informed us that the courses listed in Table 3 are neither determined by the Education Minister to be adult and community education courses nor are they essential prerequisite qualification to enter into particular profession or trade as defined in the GST Act. Therefore, these courses are not GST-free and where the provisions of section 9-5 of the GST Act are satisfied, the supply of these courses will be taxable.

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