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Edited version of your private ruling
Authorisation Number: 1012463557366
Ruling
Subject: GST and course materials
Question
Is your supply of the training materials as outlined in the facts a GST-free supply of course materials?
Answer
Yes.
Relevant facts and circumstances
· You are registered for goods and services tax (GST).
· You supply courses including certain types of courses (Courses).
· You have stated that your Courses are GST-free as education courses.
· You supply training materials to the participants of the Courses (and not to any other individuals or entities).
· The training materials are a type of container and labelled in a particular way so as to represent the same containers that are found in a particular type of industry. Each container contains a substance that is safe to handle.
· The training materials are for the purpose of training the participants in a particular type of industry.
· The substance contained in the containers is removed by the participants as part of their training.
· The training materials are discarded once the substance has been removed and at the completion of the course.
· The cost of the training materials is included in the overall Course fee charged to each participant.
· You import the training materials.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 (GST Act)
Section 38-85
Section 38-95
Section 195-1.
Reasons for decision
Under section 38-85 of the GST Act, a supply of an education course is GST-free. What constitutes an education course for GST purposes is further defined in section 195 of the GST Act.
In addition to this, a supply of course materials for a subject undertaken in an education course is also GST-free under section 38-95 of the GST Act.
In your case, you supply Courses that are GST-free as education courses. To be able to provide specific training to the Course participants you also supply training materials as outlined in the facts. It is therefore necessary to determine if these training materials can be treated as course materials for GST purposes to allow them to be supplied GST-free.
Course materials
The Australian Taxation Office's view on GST and course materials is provided by the Goods and Services Tax Ruling GSTR 2000/30. Paragraph 71 of GSTR 2000/30 states the following in relation to course materials.
Materials or items will be considered to be course materials if all of the following requirements are met:-
· The materials or items are provided by you to students.
· The materials are necessarily consumed or transformed by the students undertaking the course; and
· The materials are consumed or transformed for the purpose of the course.
Provided by you
In this case, you supply the training materials to the participants so the first dot point of paragraph 71 is satisfied.
Consumed or transformed
Paragraphs 77 and 78 of GSTR 2000/30 discuss the terms consumed and transformed.
Course materials must be used up or converted into class work, such as paintings etc. Hence the effective life of course materials is limited to the duration of the course. 'Consumed and transformed' has a narrow application in that it applies to materials that are provided by you to students in undertaking a subject such as cooking ingredients in a cooking class, cotton in a textiles class etc. However for the purposes of the GST Act, course materials will also extend to cover things that are also effectively used up in undertaking the course.
The term 'consumed' means destroyed or expended by use; used up. In the definition of course materials, 'consumed' is qualified by the requirement that it be '… by students undertaking the course for the purposes of the course'. So, if in undertaking a subject in an education course, a student uses up or expends materials, the student has consumed course materials. For example, the supply of a workbook that requires the student to complete exercises in it is a course material and therefore is GST-free.
In this case, as part of their training the participants use the training materials. The training materials are then discarded once the substance has been removed or at the completion of the course.
Following the guidance provided by the above paragraphs, we consider the training materials have been consumed once the substance has been fully or partially removed. Also, by discarding the training materials at the completion of the course, they only have an effective life limited to the duration of the course. As such the second dot point of paragraph 71 is satisfied.
Purpose of the course
Paragraph 76 of GSTR 2000/30 given below states what it means to be for the purpose of the course.
Course materials are only those materials that are necessarily consumed or transformed by the students undertaking the course for the purpose of the course. 'Purpose' is to mean 'the object for which anything exists or is done, made, used, etc' or 'an intended or desired result; end or aim. For the purposes of the GST Act, only those materials listed by you as being necessary for a particular course or subject are GST-free. Only those consumable stationery items that are required to undertake the course that are listed on a book list are GST-free. Any reasonable replacement of an item listed on a book list will also be GST-free.
Following the guidance of paragraph 76 of GSTR 2000/30, we consider that training involving the training materials would be critical for participants undertaking the Course. We therefore consider that the third dot point of paragraph 71 is also satisfied.
Given that all of the dot points of paragraph 71 of GSTR 2000/30 are satisfied, your supply of the training materials can be considered as the supply of course materials for your Courses and hence GST-free under section 38-95 of the GST Act.
Non taxable importation
Section 13-10 of the GST Act provides that an importation is non-taxable if:
· it is a non-taxable importation under Part 3-2 of the GST Act, or
· it would have been a supply that was GST-free or input taxed if it had been a supply (for example, it would be a GST-free supply had the supply been made in Australia).
In this case, your supply of the training materials in Australia is GST-free and consequently, your importation of the training materials is non-taxable under section 13-10 of the GST Act.
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