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Edited version of private ruling
Authorisation Number: 1011864441239
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Ruling
Subject: GST and adult and community course
Question 1
Does the Online Diploma course a GST-free education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No, the Online Diploma course is not a GST-free education course under section 38-85 of the GST Act.
Relevant facts
You operate an online academy and are registered for goods and services tax (GST).
You provide an Online Diploma course which educates participants on professional application.
The course is developed for beginners through to those working in the industry who want to further develop their skills and receive a diploma and is available to the general public through your website.
On completion of the course the participants are awarded a diploma from the academy. The participants will obtain job ready skills and qualification. The academy will also guide the participants in the methods for seeking employment opportunities.
You are not a registered training organisation.
You do not receive funding from the State or any other authority for the provision of your course.
You are not a school, higher education institution or a not-for-profit organisation.
You are not recognised or funded by a State or Territory authority to conduct adult and community education courses.
Reasons for decision
An education course is GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Under section 38-85 of the GST Act you make a GST-free supply if the supply is of:
· an education course; or
· administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.
The term education course is defined in section 195-1 of the GST Act to include, amongst other things, an adult and community education course.
Under section 195-1 of the GST Act an adult and community education course is a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and:
(a) is of a kind determined by the Education Minister to be an adult and community education course and is provided by, or on behalf of, a body:
i. that is a higher education institution; or
ii. that is recognised, by a State or Territory authority, as a provider of course of a kind described in the determination; or
iii. that is funded by a State or Territory on the basis that it is a provider of courses or a kind described in the determination; or
(b) is determined by the Education Minister to be an adult and community education course.'
For a course to be a GST-free adult and community course under paragraph (a) of the definition in section 195-1 of the GST Act, the following three requirements must be satisfied:
· The course must be a course of study or instruction that is likely to add to the employment related skills of people undertaking the course; and
· The course must be provided by, or on behalf of, a body that is either a higher education institution, a recognised provider of the course, or a body funded by a State or Territory; or
· The course must be of a kind determined by the Education Minister to be an adult and community education course.
Goods and Services Tax Ruling GSTR 2000/27 discusses the meaning of 'likely to add to employment related skills'. Paragraphs 15 and 22 of GSTR 2000/27 states:
15. The test as to whether an adult and community education course is likely to add to the employment related skills of people undertaking the course is an objective test and not dependent on the subjective intention of the providers of the course or the recipients. However we consider a course satisfies the test if the course meets the following requirements:
(a) It is directed at people who want to add to their employment related skills; and
i. The objectives of the course specify the employment related skills that participants will acquire in undertaking the course; and
ii. The means of imparting the skills to the participants are clearly identified prior to the commencement of the course; and
iii. There is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours.
20. Whether an adult and community education course achieves its objectives and attracts its targeted participants will depend on the nature and content of the course, not on the actual prospects of individual persons undertaking the course. On the balance of probability there must be a reasonable expectation that the course will add to the employment related skills of people undertaking the course. There must be a reasonable expectation that the course will develop skills that can be used by participants in employment, or in a business, occupation, profession or trade.
The courses you provide meet the first criterion, in that it is aimed at adding to the employment related skills in the fashion and beauty industry, of the participants.
However, as you are not a higher education institution or a body that is recognised or funded by a State or Territory authority to conduct adult and community education courses as described in the Education Minister's determination. Your online course is therefore not an adult and community education courses for the purposes of paragraph (a) of the definition in section 195-1 of the GST Act.
The alternative, under paragraph (b) of the definition, is that the course is determined by the Education Minister to be an adult and community education course.
The A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 states, at subparagraph 6(2)(b)(i), that any course must be provided by a body corporate that operates on a not-for-profit basis if the course is to qualify as a adult and community education course.
As you are carrying on your enterprise with a view of profit you do not qualify under paragraph (b) of the definition of 'adult and community education course' in section 195-1 of the GST Act.
Therefore, the online diploma course you provide is not a GST-free education course under subsection 38-85(a) of the GST Act.