Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012684082428

Ruling

Subject: GST and service agreements to provide training

Question 1

Does the partner, under the service agreement, need to remit GST to the Tax Office for teaching services provided?

Answer

Yes, the partner under the service agreement needs to remit GST to the Tax Office for teaching services provided.

Relevant facts and circumstances

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 38-85

Student Assistance Act 1973 subsection 5D(1).

Reasons for decision

An education course is GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The definition of an education course includes, amongst other things, a tertiary course. To be GST-free as a tertiary course, a course must satisfy the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 (determination).

The determination provides that an accredited vocational education and training program conducted by a Registered Training Organisation (RTO) within whose scope of registration the program is encompassed, is a tertiary course.

The supply of teaching services provided by another entity to you is not GST-free. This is illustrated in paragraph 165 -170 of Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) it states:

The partner under the service agreement has no contractual relationship with the trainees. In this case, the partner is registered for goods and services tax (GST) and will be supplying teaching services, where they satisfy all the conditions of section 9-5 of the GST Act, they will be making a taxable supply to you. In the above example, you are the recipient of the teaching services.

Under section 9-5 of the GST Act an entity makes a taxable supply if the supply is made for consideration, the supply is made in the course or furtherance of an enterprise which is carried on by the supplier, the supply is connected with Australia, and the supplier is registered or required to be registered for GST.

However, a supply is not a taxable supply to the extent that it is GST-free or input taxed.

The supply of training services by your partner to you is not regarded as the supply of a GST-free education course. Where the requirements under section 9-5 of the GST Act are satisfied your partner will be making a taxable supply of teaching services and will need to remit the GST collected on their taxable supply to the Tax Office.


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).