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Ruling

Subject: Goods and services tax and education courses

Question

Are the two short courses provided by you, GST-free education courses?

Answer

Yes, the two short courses that you provide are GST-free education courses.

Relevant facts and circumstances

You are a company registered for goods and services tax (GST) effective from 1 July 2000.

You carry on an enterprise of providing training courses.

You are a Registered Training Organisation (RTO).

As part of your business you provide two short courses.

The two short courses are conducted over three days and provide educational tools to reach profitability and provide strong Recognised Prior Learning (RPL) outcomes recognised by TAFE and other education institutions for entry into the Diplomas.

You advise that each of the courses is a short form of other courses which you provide that are accredited Vocational Education and Training (VET) programmes.

The students receive a certificate upon completion of each of the short courses.

You advise that the short courses are not a requirement to be completed prior to the Diplomas but students do receive credits for the Diplomas if they have completed these two short courses.

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 Section 195-1

Reasons for decision

Under section 9-5 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act), 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 for GST.

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

There is no provision in the GST Act for the supply of education courses to be input taxed. However, a supply of an education course can be GST-free under section 38-85 of the GST Act.

Education course is defined in section 195-1 of the GST Act to include, among other things, a tertiary course.

Tertiary course is defined in section 195-1 of the GST Act. The definition includes 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.

The Determination of Education Institutions and Courses under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 Determination No. 2002/1 (Determination 2002/1) provides schedules of types of courses that are considered to be tertiary courses and the types of educational institutions that can deliver those courses.

Determination 2002/1 provides that an accredited VET program conducted by a RTO is a tertiary course.

Under the Determination 2002/1, VET courses are defined as:

(a) an accredited vocational education and training course; or

(b) a sequence of training consisting of at least one subject or module from an accredited vocational education and training course; or

(c) a structured approach to the development and attainment of competencies for a particular Australian Qualifications Framework (AQF) qualification specified in an endorsed training package.

Under the Determination 2002/1, RTO is defined as:

a registration training organisation, being an organisation that is registered by the relevant State or Territory training recognition authority in accordance with Australian Quality Training Framework to provide one or more vocational education and training progammes;

Consequently, for the purposes of the GST Act, a VET program delivered by a RTO is a tertiary course and is GST-free under section 38-85 of the GST Act.

The Tax Office view of GST-free tertiary courses is provided in the Goods and Services Tax Ruling GSTR 2000/1 (A copy is enclosed for your reference).

GSTR 2000/1 provides at paragraphs 23 and 24 that a tertiary course generally consists of component parts that are commonly referred to as 'subject', 'course', 'module', 'unit' or 'program'. Where you supply a component part of a tertiary course that is covered by Determination 2002/1 and the recipient is enrolled in that part, the supply of that part is GST-free.

In your case:

· you are a registered RTO

· you provide the two short courses

· these two courses are a short form of other accredited VET courses you provide, and

· you are an approved supplier of those VET courses.

Therefore, when you supply the two short courses, which are a short form of your accredited VET courses, they satisfy the definition of a tertiary course and therefore the supply will be a GST-free supply of a tertiary education course.