ATO Interpretative Decision
ATO ID 2001/136 (Withdrawn)
Goods and Services Tax
GST and Educational AssessmentsFOI status: may be released
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This ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decisionThis document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is entity A, a supplier of educational assessments, making a GST-free supply under section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies an educational assessment, despite the fact that the actual assessment is conducted by entity B, an educational institution, acting as agent for entity A?
Decision
No, entity A is not making a GST-free supply under section 38-110 of the GST Act when it supplies an educational assessment, despite the fact that the actual assessment is conducted by entity B, an educational institution, acting as agent for entity A. Entity A is making a taxable supply under section 9-5 of the GST Act.
Facts
Entity A is the supplier of educational assessments. Entity A is supplying an educational assessment; however, the actual assessment is conducted by entity B. Entity B is an educational institution acting as agent for entity A. Entity A does not satisfy subsection 38-110(2) of the GST Act; however entity B does satisfy the requirements in subsection 38-110(2) of the GST Act.
Entity A is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons For Decision
The assessment or issue of qualifications for the purpose of access to education, membership of a professional or trade association, registration or licensing for a particular occupation, or employment, will be GST-free provided that the preconditions in subsection 38-110(2) of the GST Act are satisfied. Namely, the supply must be carried out by :
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- a professional or trade association; or
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- an education institution (as defined in the Student Assistance Act 1973); or
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- an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services; or
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- an authority of the Commonwealth or of a State or Territory; or
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- a local government body.
It is considered that section 38-110 of the GST Act does not intend to cover situations where one entity makes a supply and another entity carries it out. That is, the entity making the supply must also carry it out. In an agency arrangement, the agent physically carries out the supply on behalf of the principal. However, the principal is taken to not only 'make' the supply, but also 'carry out' the supply. Therefore entity A (the principal) is 'carrying out' the supply despite the fact that the actual assessment is conducted by entity B (the agent). As entity A does not satisfy subsection 38-110(2) of the GST Act the supply of the assessment will not be GST-free.
Entity A is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, as the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act; entity A is making a taxable supply under section 9-5 of the GST Act.
Date of decision: 08 December 2000
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
subsection 38-110 (2)
Division 40
subsection 3(1)
Keywords
Goods & services tax
GST free
GST education
Prior learning
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 8 December 2000 | Original statement | |
| You are here | 23 December 2005 | Archived |