Edited version of private ruling

Authorisation Number: 1011658009216

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Ruling

Subject: GST and personal qualities assessments

Is the supply of the personal qualities assessment service to non-resident students a GST-free supply?

Answer

Yes, the supply of the personal qualities assessment service is a GST-free supply.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The education institution provides a range of courses to non-resident and resident students.

In order that non-resident students gain access to the courses offered they must apply to the education institution.

The education institution charges prospective non-resident students a fee for the application to attend the education institution.

There are two types of fees charged and these are dependent on the nature of the course for which the prospective student applies.

Students seeking to enrol in Medicine, Surgery, Dental Health and Oral Health are required to pay a fee for the Personal Qualities Assessment (PQA). PQA is a test designed to assess a range of personal qualities considered important in specific courses.

The PQA is comprised of four tests. The first is similar to a standard IQ test, the second is a test around interpersonal values and social responsibility, the third is a test around interpersonal traits and the final test is a rating of the applicant's personal characteristics testing how honest and truthful a person is about themselves.

The PQA may be sat inside or at specific locations outside Australia.

The majority of applicants sit the PQA outside Australia.

The PQA does not provide a guarantee of a place in a course with the education institution but assesses the suitability of the applicant.

For other than courses the fee is non-refundable.

The fee charged is to assess the prospective student's English proficiency, Academic Qualifications, any related work experience and to ensure the student can support themselves prior to offering the student a place at the university.

There is no guarantee of a place in the education institution.

In 2010 no assessments were undertaken in Australia.

Summary

Yes, the supply of the assessment is a GST-free supply.

Detailed reasoning

Where the requirements of section 9-5 of the GST Act are met the education institution is making a taxable supply. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

In this instance the education institution satisfies the requirements of paragraphs (a) to (d) of section 9-5 of the GST Act as the university receives consideration for the supply, the supply is made in the course or furtherance of an enterprise that the university carries on, the supply is connected with Australia as the university makes the supply through an enterprise that it carries on in Australia and the university is registered for GST.

There is neither provision in the GST Act nor any other Act that makes the supply input taxed.

We now need to consider if the supply is GST-free.

Section 38-110 of the GST Act deals with the recognition of prior learning etc. That section states:

38-110 Recognition of prior learning etc.

(1) A supply is GST-free if the supply is the assessment or issue of qualifications for the purpose of:

a) access to education; or

b) membership of a professional or trade association; or

c) registration or licensing for a particular occupation; or

d) employment

(2) However, a supply is not GST-free under subsection (1) unless the supply is carried out by:

a) a professional or trade association; or

b) an education institution; or

c) 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

d) an authority of the Commonwealth or of a State or Territory; or

e) a local government body.

The supply of the PQA is the supply of a service to assess the applicants' eligibility to enrol in the courses that the education institution provides. In order for the applicant to be accepted as a student at the education institution the applicant must complete the assessment.

Upon completion of the assessment the education institution makes a decision as to the suitability of the applicant to enrol and undertake a particular course.

The assessment meets the requirements of paragraph 38-110(1)(a) of the GST Act as it is the supply of an assessment for the purposes of access to education.

Further, as the education institution is an education institution it meets the requirements of paragraph 38-110(2)(b) of the GST Act.

Accordingly the education institution is making a GST-free supply under section 38-110 of the GST Act when it assesses the applicants' suitability to enrol in specific courses that the education institution offers to prospective students.