Edited version of private ruling

Authorisation Number: 1011678482566

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Ruling

Subject: GST and delivery of training courses

Issue 1

Question 1

Are the courses you provide in your scope as a Registered Training Organisation (RTO) GST-Free?

Answer

Yes, the courses within your scope as an RTO are GST-free?

Question 2

Is the fire safety training you provide GST-free?

Answer

No, the fire safety training is a taxable supply.

Question 3

Are the mine site induction courses you provide GST-free?

Answer

Yes, the mine site induction courses are GST-free.

Question 4

Are the construction site induction courses you provide GST-free?

Answer

Yes, the construction site induction courses are GST-free.

Question 5

Are the first aid courses you provide GST-free?

Answer

Yes, the first aid courses you provide will be GST-free provided you meet the criteria.

Issue 2

Question 1

Is the cost of travel, accommodation and meals you on-charge to students GST-free?

Answer

No the cost of travel, accommodation and meals you on-charge to students is a taxable supply.

Relevant facts and circumstances

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

You are a registered training organisation (RTO) and your Vocational Education & Training Accreditation Board (VETAB)

You provide training to the mining, construction, electrical and civil engineering sectors leading to nationally recognised certification, assessments and licencing.

In your RTO scope you provide certificate courses and high risk licences.

You also provide first aid training, fire safety training, construction site inductions, and mine site inductions.

The mine site inductions are a requirement of all employees and contractors under the Coal Mines Health and Safety Regulations and NSW Occupational Health and Safety Act 1983.

The construction site inductions are a requirement of all employees and contractors under the NSW Occupational Health and Safety Act 1983.

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.

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-85(a).

A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.

Coal Mines Health and Safety Regulations

NSW Occupational Health and Safety Act 1983

Reasons for Decision

Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states that you make a taxable supply if:

· you make the supply for consideration

· the supply is made 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.

Under paragraph 38-85(a) of the GST Act a supply of an education course is GST-free.

Education course is defined in section 195-1 of the GST Act to include, amongst other things:

· a tertiary course

· an adult and community education course, or

· a professional or trade course.

Tertiary course

A tertiary course means:

· a course of study or instruction that is a tertiary course determined by the Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act

· a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-government higher education institution, or

· any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act.

To be a GST-free tertiary course, the course must be specified in the Education Ministers Determination No. 2002/1 or accredited at Masters or Doctoral level. In addition you must be an education institution as specified in the Education Ministers Determination No. 2002/1. This will usually be satisfied where an entity is a registered training organisation (RTO) and the course is provided within the scope of that entity's RTO registration.

In accordance with subsection 38-110(1) of the GST Act, a supply comprising of the assessment or issue of qualifications, will be GST-free where it is for the purposes of:

(a) access to education

(b) membership of a professional or trade association

(c) registration or licensing for a particular occupation

(d) employment.

However, in accordance with subsection 38-110(2) of the GST Act, a supply is not GST-free under subsection 38-110(1) of the GST Act unless the supply is carried out by:

· a professional or trade association;

· an 'education institution', as defined in section 195-1 of the GST Act, that is:

· a higher education institution, that is, an institution that is:

· established under Commonwealth or State or Territory government legislation as a higher education institution; or

· registered by the relevant State or Territory higher education recognition authority (DET)

· a technical and further education institution

· a secondary school

· an RTO, or

· a special school;

· 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 (for NSW, the relevant training recognition authority is VETAB);

· an authority of the Commonwealth or of a State or Territory; or

· a local government body.

(Note that the definition of 'education institution' in section 195-1 of the GST Act is as per the definition of 'education institution' in subsection 3(1) of the Student Assistance Act 1973, and Determination of Education Institutions and Courses under Subsection 3(1) and 5D(1) of the Student Assistance Act 1973 (Determination No 2007/1).

The courses you provide within your scope will be GST-free. The assessment and issue of qualifications for the courses you provide are GST-free.

It should be noted that courses supplied outside of your scope of registration as an

RTO will be subject to GST unless they meet the requirements of one of the other GST-free 'education courses' in the GST Act.

Professional or trade course

To be GST-free as a professional or trade course, a course must:

· lead to a qualification, and

· of a profession or trade in Australia.

First requirement

GSTR 2003/1 explains that documents that are qualifications or that provide evidence of a qualification include: a statement of satisfactory completion, a certificate (including a degree or diploma), a licence or an accreditation.

Where an entity issues a statement of completion this would generally satisfy the first criteria of leading to a qualification.

Second requirement

To be GST-free the qualification must be an essential prerequisite for entry to, or to commence the practice of a profession or trade in Australia.

Section 195-1 of the GST Act defines essential prerequisite as meaning that the qualification must be imposed:

         by or under an industrial instrument

if there is no industrial instrument, by a professional or trade association that operates on a national level, or

         if neither of the above applies, by a professional or trade association that operates at a State or Territory level.

Paragraph 48 of GSTR 2003/1 states:

48. A qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he or she can enter into, or commence the practice of, a particular profession or trade. This necessarily requires the imposition of penalties or sanctions if a person enters into, or commences the practice of, the profession or trade without the relevant qualification.

Paragraphs 96 and 97 provides an relevant example:

96. There are numerous industrial instruments that require a person to obtain approval or certification before a particular task or duty in an occupation can be undertaken. The fact that there is such a requirement does not necessarily mean that the particular task or duty is a separate profession or trade. If the qualification merely relates to the undertaking of a duty or task in a profession or trade, a course leading to that qualification is not a professional or trade course. The qualification is not an essential prerequisite.

Example 10 a course that fulfils a legal requirement in relation to a task

97. The Workplace Safety Act of a State requires that a person be appointed as a health and safety officer in a workplace of more than thirty people. Any person, including the employer, may perform this role if he or she is approved to do so. The individual performs their normal duties in the workplace and the role as a safety officer is merely an additional task. The legislation places the obligation on the employer to satisfy this requirement. The legal constraint does not relate to a person entering a profession or trade. A course you run to train a person to perform such a role is not a professional or trade course.

In a situation where there is no profession or trade association that requires its members to complete a course before they can enter or practice in a particular profession or trade and no penalties or sanctions are imposed if a person enters or commences any profession or trade without having completed a course, these would indicate that the course is not a professional or trade course. In addition, the obligation is on the employer to satisfy the legislative requirement. Further, it is not an essential prerequisite for an employee to hold a qualification to enter a profession or trade they merely have to hold a qualification to perform a role or function that is in addition to their normal duties so that the employer can satisfy a legislative requirement. The course would not satisfy the second requirement and would not be a GST-free professional or trade course.

The fire safety training is not an essential prerequisite and will not be GST-free as an educational course and the supply of the training is a taxable supply.

The mine site inductions are a requirement of all employees and contractors under the Coal Mines Health and Safety Regulations and NSW Occupational Health and Safety Act 1983 and a prerequisite to employment in the mining industry and as such are GST-free as a professional or trade course. The construction site inductions are also an essential prerequisite and are also GST-free.

Section 38-85 of the GST Act further provides that an education course is GST-free. For a first aid or life saving course to be GST-free, it has to meet two requirements.

First Requirement

The first aid or life saving course must be a course of study or instruction that principally involves training individuals in one or more of the following:

(i) a first aid, resuscitation or other similar life saving skills including personal aquatic survival skills but not including swimming lessons.

(ii) surf life saving; or

(iii) aero-medical rescue.

Second requirement

The first aid or life saving course must be provided by a body that is:

(i) registered (or otherwise approved) by a state or territory authority that has responsibility for registering (or otherwise approving) bodies that provide such courses; or

(ii) approved to provide such courses by a state or territory body that has responsibility for approving the provision of such courses.

A body that is registered by a state or territory training authorities to deliver

The Australian Institute of First Aid and Emergency Care Providers has advised that a body is able to provide first aid training in New South Wales if it has been registered as a first aid course provider by the NSW Workcover Authority under the NSW Occupational Health and Safety Act 1983 (NSW OHS Act).

If your first aid courses that you provide meet the criteria they will be GST-free.

Issue 2

The cost of travel, meals and accommodation meet the criteria of section 9-5 of the GST Act and are not input taxed or GST-free by any other section of the GST Act and will therefore be taxable.