Edited version of private ruling

Authorisation Number: 1011725204883

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Ruling

Subject: GST and supply of Statements of attainment

Question

Will the supply of Statements of attainment by the Registered Training Organisation (RTO) under the partnership agreement be GST-free under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Advice

Yes, the supply of Statements of attainment by the RTO under the partnership agreement will be GST-free under section 38-110 of the GST Act.

Relevant facts

You are a Registered Training Organisation (RTO) in Australia and registered for the goods and services tax (GST.

You provide prescribed training, primarily for plant operators (that is operators of forklifts, cranes, bobcats, and so on). The operators of this machinery must have a licence and be trained as per state law and regulation where these operators are located.

You are currently treating the provision of this training and assessment as a GST-free supply because it is an essential supply of education to the operators of the machinery. For example an individual cannot work as a bobcat operator without this training and licensing.

You are proposing to form a training partnership with a Trust, that is a partnership for the delivery of the training and not a partnership for tax or any other purpose. We have received a copy of the training partnership agreement.

It is proposed that the Trust will be the going concern business to deliver the training. The Trust will be supervised by you in its delivery of the training.

You will issue (where appropriate) Statements of attainment to applicants recommended by the Trust. Depending on which occupation the trainee has mastered they also receive an Assessment Summary 1 or Assessment Summary 2, and a Form 36. These forms relate to the requirements set out by the State law and regulation.

Reasons for decision

GST is payable where you make a taxable supply.

Under section 9-5 of the GST Act you make a taxable supply if:

(a) you make the supply for consideration;

(b) the supply is made in the course or furtherance of an enterprise that you carry on;

(c) the supply is connected with Australia; and

(d) you are registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Based on the information received, your supply of Statements of attainment will satisfy the conditions at paragraphs 9-5(a), 9-5(b), 9-5(c) and 9-5(d) of the GST Act as:

(a) you will supply these Statements of attainment for consideration;

(b) you will make the supply in the course or furtherance of the enterprise that you carry on;

(c) the supply will be connected with Australia as it will be done in Australia and made through a business that you carry on in Australia; and

(d) you are registered for GST.

The supply of Statements of attainment will therefore be a taxable supply to the extent they are not GST-free or input taxed.

There are no provisions in the GST Act or any other Act under which the supply will be input taxed. Therefore, what remains to be determined is whether the supply will be GST-free.

GST-free

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; or

(b) membership of a professional or trade association; or

(c) registration or licensing for a particular occupation; or

(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 ;

· 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 2002/1).

In this instance, under the partnership agreement you as an RTO will supply Statements of attainment to the trainees for the purposes of employment since the successful trainees will become licensed to operate the machinery for which they have chosen to be trained and be able to be employed to do that particular work. Hence, you will satisfy the requirements of subsections 38-110(1) and 38-110(2) of the GST Act.

Accordingly, when you will supply Statements of attainment under the partnership agreement, you will be making a GST-free supply under subsection 38-110(1) of the GST Act