Edited version of your private ruling

Authorisation Number: 1012501638900

Ruling

Subject: Supply of an instructor course

Question

Is the course you supply a GST free education course?

Answer

No, the course you supply is not a GST free education course.

This ruling applies for the following periods:

N/A

The scheme commences on:

N/A

Relevant facts and circumstances

· You are a training enterprise and you are registered for the goods and services tax (GST).

· You conduct a business of providing professional development through the delivery of training courses in a specific field.

· You are not a Registered Training Organisation (RTO) or a higher education institution.

· You supply an instructor course (Course).

· You have entered into an agreement with an entity, which is a registered training organisation (RTO).

· The entity is an Australian national organisation.

· The accreditation is the industry standard for this specific field and is delivered and recognised in each state and territory of Australia.

· Under the agreement, the entity, as an RTO, will provide quality assurance for the course you are providing, based on the course information, course assessments, Assessment Matrix and course assessor/presenter details you provide.

· The entity will manage all documentation necessary for the purpose of the tasks they perform.

· The entity will issue Statements of Attainment listing the units of competency to students who successfully complete the required training and assessment of the Course.

· All these units are listed under various code numbers as "nationally recognised training - units of competency" in the website of "training.gov.au" which is a "joint initiative of Australian States and Territory Governments".

· Under the agreement, you will be responsible for the Course organisation, administration, of enrolments/payments and for the delivery of training.

· The Course was developed and owned by you and is subject to copyright.

· Under the agreement, you will (a) notify the entity of the course dates and venues (b) receive and process enrolments and payments (c) deliver the courses (d) conduct assessments (e) forward the course attendance list along with student enrolment and evaluation forms to the entity within 14 days of the completion of the course (f) complete and forward an assessment matrix to the entity for students who submit a completed assessment portfolio.

· The entity, on their part under the agreement, will issue Statements of Attainment to the students and send it to you within 14 days

· You will then send out these Statements of Achievement, issued by the entity, to students with your own certificates.

· You also claim that, under the agreement, the entity will act as the RTO for the course.

· You were previously issued with a ruling on this matter where you were informed that the course you were providing is not a GST-free supply of an education course.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-30

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

Income Tax Assessment Act 1997 (ITAA 1997 section 995-1

Reasons for decision

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

The definition of an education course includes, amongst other things, a tertiary course, an adult and community education course (ACE), a first aid or life saving course or a professional or trade course. We have considered whether your course satisfies the requirements to be one of these types of courses.

Tertiary Course

To be GST free as a tertiary course, a course must satisfy the Education Minister determination under subsection 5D (1) of the Student Assistance Act 1973 (Determination no.2002/1)

Determination No. 2002/1 provides that a vocational education and training course conducted by a higher education institution or an RTO, is a tertiary course.

The course that you are conducting is not a course as specified in the Determination No. 2002/1 and your organisation is not an education institution as specified in Determination No. 2002/1. Therefore your course does not satisfy the definition of a tertiary course and it is not GST-free as a tertiary course.

You informed us that you have entered into an agreement with the entity, an RTO, the terms of which are provided in the facts given above. The terms of the agreement you have with the entity does not indicate that you are supplying either part or all of an accredited course on their behalf. The entity is merely issuing statements of achievements which you provide to your students with your own certificate. There is no indication whatsoever to state that you are supplying the course on behalf of the entity. Furthermore, the course you supply is owned and copyrighted by you. The facts above indicate that the entity "acts as the RTO" only for the purposes of assessing and issuing a qualification for the purpose of employment as an aqua instructor. This does not make the entity the supplier of the Course. You are the supplier of the course.

Goods and Services Tax Ruling (GSTR) 2001/1 provides further guidance on supplies that are GST-free for tertiary education courses.

Adult and Community Education (ACE) Courses

To be GST-free as an ACE course, a course must:

(i) be likely to add to the employment related skills of people undertaking the course; and

(ii) be of a kind determined by the Education Minister to be an ACE course; and

(iii) be provided by, or on behalf of, a higher education institution, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis that has not been refused recognition or disqualified by a State or Territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

Although your courses may satisfy the criteria at paragraphs (i) and (ii) above, you do not satisfy any of the requirements listed at paragraph (iii). Therefore your courses do not satisfy the definition of an ACE course and they are not GST-free as an ACE course.

Goods and Services Tax Ruling (GSTR) 2000/27 provides further guidance on supplies that are GST-free supplies of adult and community education courses.

First Aid or life saving course

To be GST-free as a first aid or life saving course, a course must satisfy both of the following requirements.

First requirement

A first aid or lifesaving course is one that principally trains individuals in one or more of the following:

(i) first aid, resuscitation or other similar lifesaving skills, including personal aquatic survival skills but not including swimming lessons;

(ii) surf lifesaving; or

(iii) aero medical rescue.

The Tax Office accepts that the instructor course may train individuals in some aspects of survival skills. However, your course is not a course principally involving training in first aid, resuscitation, or other similar life saving skills.

Although your course may contain some of the elements of a survival course, from the information provided, your course does not involve training individuals in surf lifesaving or aero-medical rescue.

As such, your course fails to satisfy the first requirement.

Second requirement

To be GST-free as an education course, it must also be provided by an entity:

(i) that is registered (or otherwise approved) by a State or Territory authority that has the responsibility for registering (or otherwise approving) entities that provide such courses; or

(ii) that is approved to provide such courses by a State or Territory body that has responsibility for approving the provision of such courses; or.

(iii) that uses, as the instructor for the course, a person who holds a training qualification for that course that was issued by Austswim Limited (ACN 097 784 122); or

(iv) that uses, as the instructor for the course, a person who holds a training qualification for that course that was issued by Surf Life Saving Australia Limited (ACN 003 147 180); or

(v) that uses, as the instructor for the course, a person who holds a training qualification for that course that was issued by the Royal Life Saving Society - Australia (ACN 008 594 616); or

(vi) that uses, as the instructor for the course, a person who holds a training qualification for that course that is a qualification (in life saving) specified in, or of a kind specified in, the regulations.

Even if you use an qualified instructor to deliver your courses they fail to satisfy the definition of a survival skills course because they do not satisfy the first criteria. Therefore your courses are not GST-free as a first aid or life saving courses.

Further information can be found in our fact sheets, Aquatic Survival and Swimming Lesson Providers Nat 10920, and Aquatic Survival and Swimming Lesson Providers Nat 10336 which are available from our website at www.ato.gov.au

Professional or trade 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" also means, among others, a professional or trade course.

A "professional or trade course" means, under the same section, 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.

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 provide training courses.

However, the course you are providing is not "an essential prerequisite" as defined above. There is neither an Australian law, nor is there uniform national or State or Territory requirements imposed by a professional or trade association that makes the course you supply a qualification that is an essential prerequisite. Therefore it is not a "professional or trade course" that satisfied the requirements of the GST Act.

Conclusion:

The course you provide is not an 'education course' under any of the definitions of section 195-1 of the GST Act, and therefore your supply of this course does not meet the requirements of section 38-85 of the GST Act for it to be a GST free supply of an education course.

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