Edited version of your private ruling

Authorisation Number: 1012462481156

Ruling

Subject: Education course

Issue:

Is the course you provide, a GST-free supply of an education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision:

Yes, the course you provide titled is a GST-free supply of an education course under section 38-85 of the GST Act.

This ruling applies for the following periods:

N/A

The scheme commences on:

N/A

Relevant facts and circumstances

· You are a company engaged in an enterprise of providing education courses.

· You are registered for the goods and services tax (GST).

· You are a training provider registered as a Registered Training Organisation (RTO) by the Australian Skills Quality Authority (ASQA) of New South Wales.

· You provide an education course.

· Under the Property, Stock and Business Agents Act 2002 of NSW an individual wishing to work in your particular field in the State of NSW needs to apply, and be granted, a certificate of registration under this Act.

· In order to qualify for this certificate of registration, a candidate must provide a Statement of Attainment showing the successful completion of a specified number of units from the Property Services Training Package (CPP07), which is listed in Training.gov.au website (http://training.gov.au).

· At the successful completion of the course you issue candidates with "Statements of Attainment" showing the successful completion of the relevant number of units from the Property Services Training Package (CPP07)

Relevant legislative provisions

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

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

Reasons for decision

Under paragraph 38-85(a) of the GST Act, a supply of an education course is GST-free.

Division 195 of the GST Act provides the definition in relation to "education courses" and the other relevant definitions which need to be considered. Under section 195-1 of the GST Act, an "education course" means, among others, a professional or trade course.

A "professional or trade course" means, under the same section of the GST Act, a course leading to a 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.

Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) states that an "industrial instrument" means:

(a)  an Australian law, or

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

In this case you are providing an educational course.

Goods and Services Tax Ruling GSTR 2003/1(GSTR 2003/1) provides the Australian Taxation Office view on supplies that are GST-free as professional or trade courses.

Paragraph 21 of GSTR 2003/1 states that for an entity to supply a 'professional or trade course', the entity must:

· supply a course,

· it should lead to a qualification,

· the qualification is an 'essential prerequisite' that is imposed under an industrial instrument or by a professional or trade association with uniform national entry requirements or, if not, entry requirements under a State of Territory legislation, and

· the qualification is an 'essential prerequisite' for entry into or to commence, a particular profession or trade (but not for the maintenance of the practice of a profession or trade).

Paragraphs 22 to 32 of GSTR 2003/1 explain what a 'course' is. Primarily, it is a question of fact. Whether or not a course leads to a qualification, in the current context, is discussed in paragraphs 33 to 41 of GSTR 2003/1.

Paragraphs 44-45 of GSTR 2003/1 explain, in part, the meaning of a qualification as follows:

44. A relevant authority or professional or trade association may issue a licence or a certificate that qualifies a person to do certain things. For example, a licence to drive a particular class of heavy road vehicle, or a practising certificate. Where this is the case, the certificate or licence is a qualification for the purposes of the section 195-1 definition of a professional or trade course.

45. Documents that are qualifications or that provide evidence of a qualification include:

· a statement of satisfactory completion;

· a certificate (including a degree or diploma);

· a licence; or

· an accreditation.

Whether a qualification is an essential prerequisite is discussed in paragraphs 46 to 49 of the GSTR 2003/1. It states:

46. 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.

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

i. by or under an industrial instrument;

ii. if there is no industrial instrument, by a professional or trade association that operates on a national level; or

iii. 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.

Paragraphs 50- 52 of GSTR 2003/1 state that an 'industrial instrument' means, among other meanings, an Australian law and, an 'Australian law' means a Commonwealth law, a State law or a Territory law.

The information you provided indicates that for a person to enter and commence work in the chosen profession in the State of New South Wales, he or she must hold a certificate of registration for that purpose. According to the information you provided, this requirement is stipulated in the Property, Stock and Business Agents Act 2002, which is a State law of New South Wales.

NSW Fair Trading is an agency of the New South Wales Government Act (Agency). The extracts of publications of this Agency you provided states that, in order to qualify for a certificate of registration, a candidate must provide a Statement of Attainment showing the successful completion of a number of units from the Property Services Training Package (CPP07).

Paragraph 28 of GSTR 2003/1 states:

28. Where the program of systematic instructions or training is divided in subjects that are presented as one course, you will need to consider all of the circumstances of the program to work out whether the whole program, or a part of it, is a professional or trade course. Factors that you need to look at include:

· the relevancy of each subject that makes up the program, to the other subjects and to the qualification that is obtained;

· whether the qualification can be obtained without doing particular subjects;

· whether assessments at the completion of particular subjects or stages of the course lead to other qualifications being obtained; and

· whether a part of the course is directed towards achieving a qualification that is generic and another part is directed towards obtaining another qualification that is imposed for admission to a particular profession or trade.

The information you provided indicates that Certificate of Registration Course for Real Estate in the State of NSW constitutes a number of units from CPP07. It is also evident that these form a program of subjects that make up the course you supply.

"training.gov.au" is a joint initiative of Australian State and Territory Governments. In its website, it states:

"training.gov.au encompasses the national register which contains the authoritative information about Registered Training Organisations (RTOs), recognised training products and the approved scope of each RTO to deliver nationally recognised training as required in national and jurisdictional legislation within Australia."

Our examination of the above website shows that you are listed as an RTO in their registry. It also lists Property Services Training Package (CPP07).

You inform us that the "Certificate of Registration Course for Real Estate in the State of NSW" you provide includes the requisite units from CPP07 for the purpose of issuing a Statement of Attainment.

You advised us that, as an RTO, you have the authority to issue a Statement of Attainment to a candidate who successfully completes the above course. You also advised us that this authority is provided to you by Australian Skills Quality Authority (ASQA).

Thus, the successful completion of the course you provide is an "essential prerequisite" for a person to enter and commence work as a real estate salesperson in the State of New South Wales. Further, the information provided shows that this essential prerequisite is imposed under an "industrial instrument", Property, Stock and Business Agents Act 2002 of NSW, which is an Australian law.

Consequently, the supply of the course in the State of NSW" is an education course that is GST-free.

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