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Ruling

Subject: GST and education course

Question

Does the education course provided by you fall within the definition of a GST-free education course under paragraph 38-85(a) in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

The education course provided by you, where the programs are specifically designed for students with disabilities, and not made available to people generally, are GST-free. Programs that are specifically designed to meet the needs of students who do not have disabilities are not GST-free.

Relevant facts and circumstances

You provide education courses to students in the primary and secondary age group.

You are a privately funded organisation.

According to our records you are registered for GST.

Your proprietary program assesses each student and identifies areas of difficulty within English and Mathematics delivering tailored remedial plans to correct any learning disability identified.

The type of education that you offer is both remedial and extension learning specifically in Maths and English for students of all abilities including disabilities.

You are not registered as a training organisation. However, the software and teaching methodology utilised is proprietary, developed and owned by another entity that is a registered training organisation.

You utilise a proprietary solution developed by that entity.

Children of all abilities including children with disabilities attend the centre as it caters for both remedial and extension learning.

The course caters for children with disabilities affecting the development of mathematical and literacy understanding including:

· attention problems

· cognitive-processing problems

· memory problems

· metacognitive deficits

The course also caters for children with literacy and numeracy learning disabilities including:

· developmental dyscalculia

· dyslexia

· dysgraphia

· dyspraxia

· dysphasia

· auditory processing disorder

· visual processing disorder

Your manager is currently a registered teacher who provides specialist Maths and English tuition to children of all abilities including children with disabilities.

Your manager will be the main person providing the teaching services. However, students will be engaged to assist her. These students will not have teaching qualifications. She will be training these students to provide assistance.

The classes will comprise between one to ten children and there will be one helper for every one to two students.

You provide the course at xyz premises.

Relevant legislative provisions

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

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

Reasons for decision

Note: all reference materials used in this ruling are available on the Australian Taxation Office website www.ato.gov.au

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

The term 'education course' is defined in section 195-1 of the GST Act to include a number of courses. We consider the following courses are relevant for discussion:

· a primary course

· a secondary course

· a special education course

Your course does not fit into the category of a primary course as a primary course relates to any course delivered by a school in accordance with the primary curriculum recognised by the education authority of the State or Territory. Paragraph 20 of Goods and Services Tax Ruling GSTR 2000/30 'supplies that are GST-free for pre-school, primary and secondary education courses' has reference.

A primary course also means any other course that the Education Minister has determined is a primary course for the purposes of the GST law. Currently, the Education Minister has not made any determination on a primary course.

A secondary course includes all secondary courses covered by the determination made by the Education Minister under the Student Assistance Act 1973 and it can be delivered by a recognised secondary school, a registered training organisation, a higher education institution or a special school.

According to the Student Assistance Act 1973 a special school is:

· an institution located in Australia that is conducted primarily for students with a disability and is:

· a government school, or

· a non-government institution that is recognised as a school under the law of a State or Territory in which the institution is located.

According to the facts provided you do not meet the category of a special school.

Accordingly, we consider you are not providing a secondary course.

Therefore, we need to consider whether your course meets the requirements of a special education course.

A course meets the requirements of a special education course as defined in section 195-1 of the GST Act if: 

· it is a course of education

· it provides special programs, and

· the special programs are designed specifically for children with disabilities or students with disabilities (or both).  

Goods and Services Tax Ruling GSTR 2002/1 provides guidance on supplies that are GST-free as special education courses. 

Course of education 

GSTR 2002/1 states at paragraphs 15 and 16 that a course of education is a course or program of study that involves systematic instruction, training or schooling in areas of scholastic and academic pursuits, vocational skills or personal development that may be delivered to a group of children or students or to an individual child or student and may take the form of a series of lessons or classes, or a unit or module that forms part of a larger course. 

Paragraph 17 of GSTR 2002/1 further states that the systematic instruction, training or schooling needs to have elements of interactive teaching, for example, delivery by an instructor or teacher, ongoing support and guidance, assessment of child's or student's progress, monitoring or supervision and provision of feedback. 

From the information provided by you, we consider that the programs you supply meet the requirements of a course of education. 

Special programs 

Paragraph 19 of GSTR 2002/1 states that a program is a special program if it is: 

· designed specifically to meet the special needs of children or students with disabilities

· designed specifically to reduce or prevent the impact of disabilities for children or students with disabilities, or

· not made available to people generally.  

Paragraph 20 of GSTR 2002/1 explains that the program as a whole must be recognised as a special program, though it is not necessary that every part of the course is 'special'. For example, the course's content may mirror that of a curriculum-based school course, but it may be delivered in a way that makes it suitable for children or students with disabilities. 

You have stated that all the programs are specifically designed to address the needs of each student and to improve their confidence and ability. Some of your students have, but are not limited to, intellectual, physical, emotional problems. Other students do not have any disabilities but attend because they have trouble keeping up with their schoolwork or they are gifted students who want to achieve a higher level of excellence in their work.  

As such, not all of your programs will satisfy the requirements of a special program.

Only those programs that are specifically designed for students with disabilities, and not made available to people generally, will be special programs. 

Designed specifically for children or students with disabilities

Paragraph 6 of GSTR 2002/1 states that a GST-free special education course must be designed specifically for:

· children with disabilities, regardless of whether they are students; or

· students with disabilities, regardless of their age.  

GSTR 2002/1 further explains at paragraph 30 that for the purposes of this Ruling a child is someone who has not yet attained the age of eighteen. A student is someone who is enrolled, or will enrol, in a course or program of study involving systematic instruction, training or schooling in the areas stated at paragraph 15 of this Ruling. A student can be someone of any age and may be enrolled on a full or part-time basis. 

GSTR 2002/1 also states that a disability exists where an individual has difficulty in executing activities or has problems being involved in life situations because some body function or structure is impaired. It is accepted that a child or student has a disability if he or she has a learning disability/specific learning difficulty/dyslexia, autism spectrum disorder, physical disability, an emotional disorder, a language disorder, a hearing impairment, a visual impairment or an intellectual disability that causes him or her difficulty in executing activities or problems in being involved in life situations.  

You have stated that some of your students have one or more of these disabilities and as all your programs are specifically designed to meet the needs of each student, those that are designed for students with one of the listed disabilities will satisfy the requirement that the program is 'designed specifically for children or students with disabilities'. 

However, those programs that are specifically designed for students who have no disabilities but attend because they have trouble keeping up with their schoolwork or want to achieve a higher level of excellence in their work will not satisfy the requirement that the program is 'designed specifically for children or students with disabilities'. 

In conclusion, only those programs that are specifically designed for students with disabilities and are not made available to people generally will satisfy the definition of special education courses, and therefore are GST-free. All programs that are specifically designed to meet the needs of students who do not have disabilities are not special education courses and accordingly are not GST-free.

Further issues for you to consider

Please note that whether it is necessary for you to register as a training organisation is a business choice that you have to make, and the ATO is not able to provide advice on the matter.