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Edited version of your written advice

Authorisation Number: 1051429070509

Date of advice: 14 September 2018

Ruling

Subject: GST and secondary and tertiary courses

Question

Answer

No

Question

Answer

No

Relevant facts and circumstances

You provide tuition to individuals.

You are not a registered training organisation.

You are not a secondary or tertiary education institution.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 (GST Act) sections 9-5, 9-10, 9-20, 23-5 & 38-85

Reasons for decision

1. Section 38-85 of the GST Act provides for the supply of an education course to be GST-free.

The term education course is defined in section 195-1 of the GST Act and includes a number of different types of courses.

Secondary course

Section 195-1 of the GST Act defines secondary course to mean:

Goods and services tax: supplies that are GST-free for pre-school, primary and secondary education courses GSTR 2000/30 helps to work out which supplies of pre-school, primary and secondary education courses and which supplies related to such education courses, are GST-free under Subdivision 38-C of the GST Act.

Paragraph 24 of GSTR 2000/30 has been reproduced below:

You are not an education institution as described above at paragraph 24 of GSTR 2000/30 as you are not a secondary school, an RTO, a higher education institution or a special school.

The facts available do not indicate that you are acting as an agent for the educational institutions. Further, your supplies of tuition are considered to be privately made. Therefore, your supply will not satisfy the definition of a secondary course under section 38-85 of the GST Act and will not be GST-free.

Tertiary course

Section 195-1 of the GST Act defines tertiary course as:

Goods and services tax: supplies that are GST-free for tertiary education courses GSTR 2001/1 deals with supplies of tertiary courses that are GST-free under Subdivision 38-C of the GST Act.

Paragraphs 13, 15A-17 of GSTR 2001/1 have been reproduced below:

You are not an RTO. Further, you are not a higher education institution because you are not an institution that was established by a law of the Commonwealth, a State or a Territory as a higher education institution and you are not registered or taken to be registered as a higher education provider. The facts available do not indicate that you are acting as an agent for a tertiary institution.

Therefore, your course is not a tertiary course under paragraph (a) (aa) an (b) of the definition of tertiary course in section 195-1 of the Act. Consequently, the tuition you provide is not GST-free.

Taxable supplies

Section 9-5 of the GST Act provides that you make a taxable supply if you make the supply for consideration; in the course or furtherance of an enterprise that you carry on; the supply is connected with Australia; and you are registered or required to be registered.

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

There is no provision in the GST Act that makes the supply you make input taxed.

You are currently not registered for GST and you informed us that your turnover is below the registration turnover threshold. Entities not registered or required to be registered for GST do not make taxable supplies and do not charge GST on their supplies.

Please note that when your turnover meets or is above the GST registration turnover threshold of $75,000 you will need to register for GST and your supplies will be taxable.

Reasons for decision

2. Goods and services tax (GSTR 200/37) is about agency relationships and the application of the law.

Paragraph 49 of GSTR 2000/37 has been reproduced below:

In this case the example in paragraph 49 of GSTR 2000/37 is similar to the arrangement described in the facts. You in your capacity as paying agent for the students (principals) pay the enrolments on behalf of the students’ and are subsequently reimbursed by the students. We understand that in this case you are reimbursed the whole amount paid to the relevant entities and you are not out of pocket.

The enrolment services to which the payment relates is supplied by the relevant entities to the students (principals), not to you as paying agent. Therefore, the amount paid by the students to you as paying agent is a reimbursement which forms no part of the consideration payable to you for your supply of agent’s services. Consequently, the reimbursed amounts are not considered part of your GST turnover.

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