Edited version of private ruling

Authorisation Number: 1011611836671

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Ruling

Subject: GST and education course

Question

Are you making a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you provide courses recognised by a third party registered organisation?

Answer: No.

Relevant facts and circumstances

You are registered for goods and services tax (GST).

You provide courses pursuant to the third party entity course.

These courses are provided by a teacher, who is an accredited provider of the third party entity course.

You conduct courses from introduction to the senior syllabus.

You are contracted by the schools to provide the Courses.

The courses are provided to school students as part of their year 12 Studies which give the students the year 12 Certificate of Education.

You advised the following:

Year 12 subject course is a recognised Course.

The Course is an "essential prerequisite". If a student applying for a tertiary course has the year 12 course as part of their qualifications that student would have greater success in their application as opposed to a student applying for the tertiary course without year 12 Course.

It is an essential prerequisite to have passed the third party entity Intermediate Foundation examination to be able to enter the course to be a teacher of the third party entity. These days it is essential that students wishing to become teachers have passed a recognised course in their training. Entity X has their own requirements as to the standard as do other teaching organisations. One cannot enter a Teaching Course without the recognised standard required by that organisation. There are many schools teaching various courses. If a teacher is not recognised by the third party entity then that teacher cannot enter their students for examinations within the third party entity This prevents people who are not properly qualified from opening up schools and sending their students for examinations.

Passing of the Intermediate examination is a prerequisite for the Teacher's Certificate issued by the third party entity.

On obtaining the intermediate certificate a person can enter the Teaching Certificate program of the third party entity. On completion of that program the student is registered as a Teacher of the third party entity.

You do not provide the Courses in order to issue course instructor qualifications. The teachers' qualifications are provided by the third party entity.

You are neither a registered training organisation, nor recognised as a school under the state law.

In response to our request for information, you have not provided any details of any organisation that administers and enforces the requirements for obtaining qualifications or entering the profession of a teacher.

Summary

You are not making a GST-free supply under section 38-85 of the GST Act when you provide Courses recognised by the third party entity.

Detailed reasoning

An education course is GST-free under the GST Act.

An education course is defined under section 195-1 of the GST Act as being:

· a pre-school course

· a primary course

· a secondary course

· a tertiary course

· a special education course

· an adult and community education course

· an English language course for overseas students

· a first aid or life saving course

· a professional or trade course, or

· a tertiary residential college course.

Your courses are neither English language courses for overseas students nor first aid or life saving courses.

Your courses are not tertiary or adult and community education courses as they are not determined by the Federal Education Minister to be tertiary or adult and community education courses; nor are you a registered training organisation. Nor are they pre-school, primary or secondary courses as you are not recognised as a school or registered training organisation under a state law.

Your courses do not satisfy the definition of a tertiary course because your courses are not determined by the Federal Education Minister to be tertiary courses.

Your courses are not special education courses as they are not designed specifically for children or students with disabilities.

The remaining avenue for your courses to be GST-free is as professional or trade courses.

Professional or trade course

Goods and Services Tax Ruling GSTR 2003/1 explains the meaning of 'professional or trade course'.

Paragraph 14 of GST 2003/1 provides that a course is a professional or trade course if:

· it is a course leading to a qualification, and

· the qualification is an 'essential prerequisite'

It is accepted that the courses you provide lead to qualifications.

Section 195-1 of the GST Act provides that, for a qualification to be an essential prerequisite, it must be imposed by or under an industrial instrument. If there is no industrial instrument, the qualifications must be imposed by a professional or trade association that operates on a national, State or Territory level.

You have not provided any evidence to show that the qualifications to which your courses lead are imposed by an industrial instrument or a professional or trade organisation as described above.

As the courses you provide do not lead to qualifications that are 'essential prerequisites', these courses are not professional or trade courses.

Therefore, as the courses you provide do not satisfy any of the definitions of an education course under section 38-85 of the GST Act, your supply of these courses is not GST-free.