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Ruling

Subject: goods and services tax (GST) and education courses.

Question 1:

Is GST payable on your supplies of various certificate courses?

Answer:

No.

Question 2:

Will GST be payable on your supplies of the continuing professional development (CPD) courses for people working in certain areas?

Answer:

Yes.

Relevant facts and circumstances

You are registered for GST.

You are an RTO.

You supply training courses for people working in certain areas or likely to gain employment in these areas.

You charge fees for your courses.

You are supplying or will supply various certificate courses.

The certificate courses are within the scope of your RTO registration.

You will also supply CPD courses for people working in certain areas.

The CDP courses will include training in certain subjects:

The CPD courses will not result in the issue of qualifications.

The CPD courses will not be within the scope of your RTO registration.

You are not an institution that was established by a law of the Commonwealth, a State or a Territory as a higher education institution.

You are not an institution that is registered or taken to be registered by the government agency.

You are not a higher education institution as defined in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) (higher education institutions as defined in section 195-1 of the GST Act are institutions specified in section 4, or paragraph 34(4)(b), (f) or (h), of the Higher Education Funding Act 1988 and you are not listed in those provisions).

You are not recognised by a State or Territory authority as a provider of Adult and Community Education courses.

You are not funded by a State or Territory on the basis that you are a provider of Adult and Community Education courses.

You are not a non profit body.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 9-5

A New Tax System (Goods and Services Tax) Act 1999 subsection 9-40

A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-85(a)

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

Higher Education Funding Act 1988 section 4 and paragraphs 34(4)(b), (f) and (h),

Student Assistance Act 1973 subsection 5D(1)

Reasons for decisions

GST is payable by you where you make a taxable supply.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

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.

However, the supply is not a *taxable supply to the extent that it is *GST-free

or *input taxed.

(*Denotes a term defined in section 195-1 of the GST Act)

You satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act because:

· you supply/will supply the courses for consideration

· you supply/will supply the courses in the course or furtherance of an enterprise that you carry on

· your supplies of the courses are/will be connected with Australia, and

· you are registered for GST.

There are no provisions in the GST Act under which your supplies of the courses are input taxed.

Therefore, what remains to be determined is whether your supplies of the courses are GST-free.

Question 1:

Summary

GST is not payable on your supplies of the certificate courses in question because they are tertiary courses.

Detailed reasoning

In accordance with paragraph 38-85(a) of the GST Act, a supply of an education course is GST-free.

Education course is defined in section 195-1 of the GST Act to be any of the following courses:

· a pre-school course

· a primary course

· a secondary course

· a tertiary course

· (f) a special education course

· an adult and community education course

· an English language course for overseas students

· a first aid or life saving course

· a professional or trade course

· a tertiary residential college course.

Tertiary course is defined in section 195-1 of the GST Act as:

(a) 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 purposes of that Act; or

(aa) a course of study or instruction accredited at Masters or Doctoral level

and supplied by a *higher education institution or a *non-government higher education institution; or

(b) any other course of study or instruction that the Education Minister has

determined is a tertiary course for the purposes of the GST Act.

Courses covered by the determination referred to in paragraph (a) of the definition of tertiary course (Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2)) include courses provided by RTO's where the courses are within the scope of the RTO registration.

You are an RTO.

The certificate courses in question are within the scope of your RTO registration.

Therefore, the certificate courses in question are tertiary courses. Hence, these courses are education courses as defined in the GST Act.

Therefore, your supplies of these courses are GST-free. Hence, your supplies of these courses are not taxable supplies. Therefore, GST is not payable on your supplies of these courses.

Question 2:

Summary

Your CPD courses will not meet the definition of education course in the GST Act.

GST will be payable on your supplies of the CPD courses as all of the requirements of section 9-5 of the GST Act will be satisfied.

Detailed reasoning

Tertiary courses

Your CPD courses will not be within the scope of your RTO registration. These courses are not tertiary courses as defined in Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2).

Your CPD courses will not be Masters or Doctoral level courses.

No determination has been made by the Education Minister under paragraph (b) of the definition of tertiary course.

Therefore, your CPD courses are not tertiary courses.

Professional or trade courses

Professional or trade course is defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:

(a) for entry to a particular profession or trade in Australia; or

(b) to commence the practice of (but not to maintain the practice of) a

profession or trade in Australia.

In accordance with section 195-1 of the GST Act, a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed:

(a) by or under an *industrial instrument; or

(b) if there is no industrial instrument for that profession or trade but there is

a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or

(c) if neither paragraph (a) nor (b) applies but there is a professional or trade

association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association.

Paragraph 16 of Goods and Services Tax Ruling GSTR 2003/1 states:

16. If a person cannot enter, or commence practising in, a profession or trade without a particular qualification, a course that leads to that qualification is a professional or trade course.

Paragraph 98 of GSTR 2003/1 states:

98. The exclusion in paragraph (b) of the definition of a professional or trade course in section 195-1 ensures that a course which leads to a qualification that is an essential prerequisite to maintaining the practice of a profession or trade, is not a professional or trade course.

Paragraph 99 of GSTR 2003/1 provides that maintaining the practice of a profession or trade includes such things as undertaking continuing professional development.

Your CPD courses will not lead to qualifications that are essential prerequisites for entry to a particular profession or trade in Australia or to commence the practice of a profession or trade in Australia. Therefore, your CPD courses will not be professional or trade courses as defined in the GST Act.

Your CPD courses will not be any other type of education course as defined in the GST Act.

Therefore, your supplies of the CPD courses will not be GST-free under paragraph 38-85(a) of the GST Act.

Your supplies of the CPD courses will not be GST-free under any provision of the GST Act.

Therefore, as all of the requirements of section 9-5 of the GST Act will be satisfied, you will make taxable supplies of the CPD courses. Hence, GST will be payable on your supplies of the CPD courses.