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Edited version of private advice

Authorisation Number: 1012648444922

Ruling

Subject: Goods and services tax (GST) and education courses

Question 1

Is the tuition supplied by you to the students enrolled in your school and delivered by external tutors GST-free?

Answer

Yes

Question 2

Is the tuition supplied by you to the members of the general public and delivered by external tutors GST-free?

Answer

No.

Relevant facts and circumstances

You are a combined primary and secondary school.

You are registered for GST.

You are an endorsed charity.

Part of your operations includes the provision of individual and group tuition to both enrolled students and members of the general public.

You engage external tutors to deliver this tuition and you invoice the users of this service. You manage the delivery of the tuition by the external tutors. The tutors provide their services to you. You pay and are liable to pay the external tutors for their services.

The tuition takes place both during school hours and after hours. The enrolled students may be taking the lessons during school hours, after school hours or both.

The lessons are not compulsory for any of the students.

The tuition is related to the school's curriculum.

Many of the enrolled students are also involved in certain school activities.

You do not supply the tuition for less than 50% of the GST inclusive market value of the supply.

You do not supply the tuition for less than 75% of your cost of supplying the tuition.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

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

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

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

A New Tax System (Goods and Services Tax) Act 1999 section 38-250

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

Reasons for decision

Question 1

Summary

Your supplies of tuition to the students enrolled in your school are part of a GST-free supply of an education course.

Detailed reasoning

You must pay the GST payable on any taxable supply that you make.

You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:

You make a taxable supply if:

(*Denotes a term defined in the GST Act)

Your supplies of tuition meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:

There are no provisions in the GST Act under which your supplies of tuition are input taxed. Therefore, what remains to be determined is whether your supplies of tuition are GST-free.

Paragraph 38-85(a) of the GST Act provides that a supply of an education courses is GST-free.

In accordance with section 195-1 of the GST Act, the definition of 'education course' includes, among other things, a primary course and a secondary course.

Primary course is defined in section 195-1 of the GST Act. It states:

primary course means:

Secondary course is defined in section 195-1 of the GST Act. It states:

secondary course means:

Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) provides that accredited secondary courses supplied by secondary schools are secondary courses.

You are a school that supplies GST-free primary and secondary courses.

Goods and Services Tax Ruling GSTR 2000/30 sets out the Australian Taxation Office view on supplies that are GST-free for pre-school, primary and secondary education courses.

Paragraphs 42 to 47 of GSTR 2000/30 discuss the supply of activities that are related to a primary school or secondary school curriculum. They state:

Example - Remedial Teaching

In your case, you are a school that supplies GST-free primary and secondary courses. You are supplying the tuition in question to the enrolled students and members of the general public. You engage external tutors to deliver the tuition to the students and members of the general public. You pay and are liable to pay the tutors for their supplies of teaching services to you. You invoice the users of your services. You also advised that the tuition that you supply is related to the school's curriculum.

Based on the information that you have provided, your supply of tuition to the students enrolled in your school is GST-free as these are curriculum related activities and therefore part of a supply of a primary or secondary course.

Therefore, your supplies of tuition to the students enrolled in your school are not taxable supplies as they do not meet all the requirements of section 9-5 of the GST Act. Hence, you are not liable to pay GST on your supplies of tuition to the students enrolled in your school.

Question 2

Summary

Your supplies of tuition to the members of the general public are taxable supplies as the supplies are not part of a supply of a GST-free education course.

Detailed reasoning

As you are not supplying a primary or secondary course to the members of the general public, your supply of tuition to them is not part of a supply of a primary or secondary course. Therefore, your supplies of tuition to the members of the general public are not GST-free under paragraph 38-85(a) of the GST Act.

There are no other provisions in the GST Act under which your supplies of tuition to the members of the general public are GST-free.

As all the requirements of section 9-5 of the GST Act are met, your supplies of tuition to the members of the general public are taxable supplies. Hence, GST is payable by you on these supplies.


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