Edited version of private ruling

Authorisation Number: 1011686137489

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: goods and services tax (GST) and education courses

Question

Is GST payable on your supplies of courses 1 to 14?

Answer

GST is not payable on your supplies of courses 1 to 8, 10 and 12.

GST is payable on your supplies of courses 9, 11, 13 and 14.

GST is payable by you where another training organisation pays you.

Relevant facts and circumstances

You are registered for GST.

You carry on a business in Australia of supplying training courses.

You supply the following courses:

· Boom lift operation course (course number 1): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a boom lift.

· Telescopic handlers both under 3 and above 3 tonnes in capacity operation course (course number 2): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a telescopic handler.

· Bridge and gantry cranes - single hook operation course (course number 3): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a bridge and gantry crane - single hook.

· Vehicle loading crane - below 10 tonnes operation course (course number 4): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a vehicle loading crane - below 10 tonnes.

· Non-slewing mobile crane - below 3 tonnes operation course (course number 5): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a non-slewing mobile crane - below 3 tonnes.

· Bridge and gantry cranes - dual hook operation course (course number 6): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a bridge and gantry crane - dual hook.

· Vehicle loading cranes - above 10 tonnes operation course (course number 7): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a vehicle loading crane - above 10 tonnes.

· Non-slewing mobile cranes - above 3 tonnes operation course (course number 8): This course leads to the issuing of a licence that a law requires someone to hold in order to operate a non-slewing mobile crane - above 3 tonnes.

· Work safely in the construction industry nationally accredited course (course number 9): This course leads to the issuing of a licence that a law requires someone to hold in order to carry out construction type work.

· Erect and dismantle restricted height scaffolding course (course number 10): This course leads to the issuing of a licence that a law requires someone to hold in order to erect and dismantle restricted height scaffolding.

· Work safely at heights course (course number 11): This course leads to the issuing of a licence that a law requires someone to hold in order to work at heights.

· Handling and using dogging tools and equipment course (course number 12): This course leads to the issuing of a licence that a law requires someone to hold in order to handle and use dogging tools and equipment.

· Apply OHS requirements, policy and procedures in the construction industry course (course number 13).

· Refresher training course to renew the high risk licence after 5 years to operate cranes, EWP, forklifts and other machinery (course number 14): This course is required by a law.

You charge fees for your supplies of the courses.

Sometimes an entity requests training to be provided to its personnel and the entity pays you. Sometimes an entity requests training to be provided to its personnel; the entity pays a training organisation other than yourself and that other training organisation pays you.

You are not a Registered Training Organisation.

You are not recognised by a State or Territory authority as a provider of Adult and Community Education courses.

You are not funded by a State or Territory on the basis that you are a provider of Adult and Community Education courses.

Reasons for decision

Summary

GST is not payable on your supplies of courses 1 to 8, 10 and 12, as they are GST-free supplies of education courses under paragraph 38-85(a) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)..

GST is payable on your supplies of courses 9, 11, 13 and 14, as these supplies satisfy all of the requirements of section 9-5 of the GST Act.

GST is payable by you where another training organisation pays you, as you are making a supply of teaching services to the training organisation under these circumstances, and this supply satisfies all of the requirements of section 9-5 of the GST Act.

Detailed reasoning

GST is payable by you where you make a taxable supply.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that

you *carry on; and

(c) the supply is *connected with Australia; and

(d) 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.

(*Denotes a term defined in section 195-1 of the GST Act)

In your case, you satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply courses for consideration and you make these supplies in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your supplies of the courses are input taxed.

Therefore, what remains to be determined is whether your supplies of the courses are GST-free.

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

Education course is defined in section 195-1 of the GST Act. The definition lists various types of education courses, including professional or trade courses.

Section 195-1 of the GST Act defines professional or trade course. It states:

professional or trade course means a course leading to a qualification

that is an *essential prerequisite:

(a) for entry to a particular profession or trade in Australia; or

(b) to commence the practice of (but not to maintain the practice of) a profession or trade in

Australia.

Essential prerequisite' is defined in section 195-1 of the GST Act, which states:

essential prerequisite: a qualification is an essential prerequisite in relation to

the entry to, or the commencement of the practice of, a particular profession or

trade if the qualification is imposed:

(a) by or under an *industrial instrument; or

(b) if there is no industrial instrument for that profession or trade but there

is a professional or trade association that has uniform national

requirements relating to the entry to, or the commencement of the

practice of, the profession or trade concerned by that association; or 

(c) if neither paragraph (a) nor (b) applies but there is a professional or

trade association in a State or Territory that has requirements relating to

the entry to, or the commencement of the practice of, the profession or

trade concerned by that association.

An 'industrial instrument' is defined in section 195-1 of the GST Act as having the meaning given by section 995-1 of the Income Tax Assessment Act 1997 ('ITAA 1997'), and in accordance with that income tax provision, an industrial instrument includes an Australian law.

Under section 995-1 of the ITAA 1997, 'Australian law' includes a certain type of law.

The licences are qualifications.

The licence that course number 1 leads to is an essential prerequisite for entry to the trade of boom lift operator.

The licence that course number 2 leads to is an essential prerequisite for entry into the trade of telescopic handler operator.

The licence that course number 3 leads to is an essential prerequisite for entry into the trade of bridge and gantry crane - single hook operator.

The licence that course number 4 leads to is an essential prerequisite for entry into the trade of vehicle loading crane - below 10 tonnes operator.

The licence that course number 5 leads to is an essential prerequisite for entry into the trade of non-slewing mobile crane - below 3 tonnes operator.

The licence that course number 6 leads to is an essential prerequisite for entry into the trade of bridge and gantry crane - dual hook operator.

The licence that course number 7 leads to is an essential prerequisite for entry into the trade of vehicle loading crane - above 10 tonnes operator.

The licence that course number 8 leads to is an essential prerequisite for entry into the trade of non-slewing mobile crane - above 3 tonnes operator.

The licence that course number 10 leads to is an essential prerequisite for entry into the trade of scaffolder.

The licence that course number 12 leads to is an essential prerequisite for entry into the trade of dogger.

Therefore, courses 1 to 8, 10 and 12 are professional or trade courses. Hence, your supplies of these courses are GST-free education courses under paragraph 38-85(a) of the GST Act. Therefore, your supplies of these courses are not taxable supplies, as not all of the requirements of section 9-5 of the GST Act are satisfied. Consequently, GST is not payable on your supplies of these courses.

Goods and Services Tax Ruling GSTR 2003/1 provides guidance on the meaning of professional or trade course.

Paragraph 68 of GSTR 2003/1 is relevant to courses number 9, 11 and 13. It states:

68. To become a taxi driver, under a State law, a person is required to hold a current motor vehicle driver's licence. However, such a licence is obtained to enable a person to drive a motor vehicle generally and is a requirement for many occupations. Doing a driving course to obtain a motor vehicle driver's licence does not lead to a qualification that is an essential prerequisite for entry into a particular profession or trade. The qualification is generic in nature and not for a particular profession. The driving course is not a professional or trade course.

Courses 9, 11 and 13 are generic in nature and none of them is for a particular trade or profession (each course relates to a range of professions and/or trades). Therefore, these courses are not professional or trade courses.

Paragraphs 98 and 99 of GSTR 2003/1 are relevant to course number 14.

Paragraph 98 of GSTR 2003/1 states:

98. The exclusion in paragraph (b) of the definition of a professional or trade course in section 195-1 ensures that a course which leads to a qualification that is an essential prerequisite to maintaining the practice of a profession or trade, is not a professional or trade course.

Paragraph 99 of GSTR 2003/1 provides that maintaining the practice of a profession or trade includes such things as refresher courses.

Course number 14 is a refresher course. Therefore, it is not a professional or trade course.

Courses 9, 11, 13 and 14 are not any type of education course as defined in the GST Act. Therefore, your supplies of these courses are not GST-free under paragraph 38-85(a) of the GST Act. Your supplies of these courses are not GST-free under any other provision in the GST Act. Hence, as all of the requirements of section 9-5 of the GST Act are satisfied, your supplies of these courses are taxable supplies, and therefore, GST is payable on your supplies of these courses.

We consider that you are supplying a course where the entity that requests training for its personnel pays you.

We do not consider that you are supplying a course where the entity that requests training for its personnel pays a training organisation other than yourself. In these cases, you are instead supplying teaching services to the other training organisation. The supplies that you make in these cases satisfy all of the requirements of section 9-5 of the GST Act. Hence, you make taxable supplies under these circumstances, and therefore, GST is payable on the supplies you make under these circumstances (GST is to be calculated on the money you receive from the other training organisation).