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Ruling
Subject: GST and supply of education course
Questions
Is your supply of the course a taxable supply?
Are your supplies of other services taxable supplies?
Answers
Yes, your supply of the course is a taxable supply.
Yes, your supplies of other services are taxable supplies.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You are not a registered training organisation (RTO).
You deliver a training course on behalf of RTOs.
You designed the course and own the intellectual property, the training materials, process, document templates and all other items required by the course participants.
Participants are enrolled by TAFE. TAFE then contracts with RTOs to deliver the course. As the RTOs are unable to deliver the course, the RTOs contract with you to deliver it on their behalf.
The course is delivered in the workplace. The agreement to provide the course is between the employer and TAFE. The employer pays for the course fees.
TAFE issues the certificates upon completion of the course.
You invoice the RTOs for delivering the course.
The course is an accredited vocational education and training (VET) course.
The course does not lead to a qualification that is an essential prerequisite for entry to, or the commencement of the practice of a particular profession or trade in Australia.
You also supply other services in the course of carrying on your enterprise such as benchmarking services, consulting services, training services and auditing services (the other services).
You do not provide supplies or services to non-resident entities.
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
Reasons for decisions
GST is payable on a taxable supply.
According to 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; and
· the supply is made in the course or furtherance of an enterprise that you carry on; and
· the supply is connected with Australia; and
· you are registered or required to be registered for GST.
A supply is not a taxable supply to the extent that it is GST-free or input taxed.
1. Supply of the course
You advised that you designed the course and that you own the intellectual property, training materials, process, document templates and other items required by the course participants. As such, we consider that you are supplying the course to the RTOs and delivering it on their behalf is part of that supply.
You make the supply of the course for consideration and in the course of your enterprise. The supply is connected with Australia; and you are registered for GST. The requirements in paragraphs 9-5(a), 9-5(b), 9-5(c) and 9-5(d) are all satisfied. Therefore, your supply of the course is a taxable supply unless it is GST-free or input taxed.
There is no provision in the GST Act under which your supply of the course would be input taxed. Thus, what is left to determine is whether it is GST-free.
GST-free supply
Under section 38-85 of the GST Act, the supply of an education course is GST-free.
An education course is defined in section 195-1 of the Act to include a tertiary course, and a professional or trade course among others.
Tertiary course
A tertiary course means:
· 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 for the purpose of that Act; or
· a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher educational institution or a non-government higher education institution; or
· any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act.
The Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) (as amended) defines a tertiary course to include a full time course specified in Column 1 of the table in Schedule 2 to this instrument that is provided by an education institution specified for that course in Column 2 of that table.
Schedule 2 to Determination 2009/2 specifies as a tertiary course a VET course provided by a higher education institution or an RTO.
While the course that you supply is an accredited VET course, you are not a higher education institution or an RTO. As such, the course is not a tertiary course for the purpose of 38-85 of the GST Act.
Professional or trade course
A professional or trade course is a course leading to a qualification that is an essential prerequisite for entry to, or to commence the practice of, a particular profession or trade in Australia.
You advised that the course that you supply does not lead to a qualification that is an essential prerequisite for entry to, or to commence the practice of, a particular profession or trade in Australia. Thus, the course is not a professional or trade course for the purpose of 38-85 of the GST Act.
As the course that you supply is not tertiary course or a professional or trade course, it is not an education course that is GST-free under section 38-185 of the GST Act. Accordingly, your supply of the course is a taxable supply.
2. Supply of other services
You advised that you also supply other services such as benchmarking services, consulting services, training services and auditing services. Your supplies of these other services satisfy all the requirements in section 9-5 of the GST Act and are not GST-free or input taxed. Therefore, your supplies of the other services are taxable supplies.