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Ruling

Subject: Goods and services tax (GST) and education courses

Question

Is GST payable on your supply of various courses?

Answer

Yes.

Relevant facts and circumstances

You are registered for GST.

You are not an RTO.

You are not an institution that is established by a law of the Commonwealth, a State or a Territory as a higher education institution or an institution registered or taken to be registered by TEQSA as a higher education provider.

You are not an institution specified in section 4, or paragraph 34(4)(b),(f) or (h), of the Higher Education Funding Act 1988.

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

You are not government funded.

You are not a non-profit body.

You are supplying various courses for a fee:

The courses provide training on various tasks.

Each course runs for a number of days and is facilitated by you.

At the end of each course, the student must sit an exam.

On successful completion of each course, a student gets a certificate.

There is no law or legal requirement that one have the qualifications one receives on successful completion of any of the courses in order to enter or commence the practice of particular professions or trades.

In response to our question 'Is there a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, a particular profession or trade and that imposes the relevant qualifications as a requirement for entering or commencing the practice of that particular profession or trade?', you advised that there is a certification requirement for certain professionals doing certain tasks.

There is no professional association that can impose a penalty on someone who enters or commences the practice of the relevant profession/s or trades without holding the relevant qualifications.

You stated that each course would be done only to update or improve the knowledge/skills of someone already working in an associated occupation.

You stated that the courses are not available to adults in the general community and that they are only available to people who already work in an associated occupation for a legitimate company.

The courses are provided to employees of entities other than you at the request of the employers.

Your brochure for a certain course indicates that the course is aimed at certain sorts of professionals as well as other people.

Your brochure for a certain course provides indicates that it is aimed at certain sorts of professionals.

Your brochure for a certain course indicates that the course is intended for certain sorts of professionals.

Your brochure for a certain course indicates that the course is aimed at people working in certain environments as well as the general public. This information indicates that this course is available to adults in the general community.

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 section 9-5

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

Reasons for decision

Summary

Your courses are not education courses for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Therefore, your supplies of the courses are not GST-free under paragraph 38-85(a) of the GST Act.

GST is payable on your supplies of the courses because:

you supply the courses for consideration

· these supplies are made in the course or furtherance of an enterprise that you carry on

· the supplies are connected with Australia

· you are registered for GST, and

· your supplies of the courses are not GST-free or input taxed.

Detailed reasoning

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:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that

you *carry on; and

(c) the supply is *connected with Australia; and

(d) 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. This is because:

· you supply the courses for consideration

· these supplies are made in the course or furtherance of an enterprise that you carry on

· the supplies are 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.

A supply of an education course is GST-free under paragraph 38-85(1) of the GST Act.

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

(a) a pre-school course

(b) a primary course

(c) a secondary course

(d) a tertiary course

(f) a special education course

(g) and adult and community education course

(h) an English language course for overseas students

(i) a first aid or life saving course

(j) a professional or trade course, and

(k) a tertiary residential college course.

Tertiary courses

In accordance with section 195-1 of the GST Act, tertiary course means:

(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

(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.

A determination of the type referred to in paragraph (a) has been made called Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (SA determination). The SA determination provides that vocational courses provided by RTOs and higher education institutions are tertiary courses.

A higher education institution, for the purposes of the SA determination is:

(a) an institution that is established by a law of the Commonwealth, a State or

a Territory as a higher education institution, or

(b) an institution registered or taken to be registered by TEQSA as a higher

education provider.

You are not an RTO or a higher education institution (for the purposes of the SA determination). Therefore, your courses are not tertiary courses under paragraph (a) of the definition of tertiary course.

Your courses are not Masters or Doctoral level courses. Therefore, your courses are not tertiary courses under paragraph (aa) of the definition of tertiary course

A determination of the type in paragraph (b) of the definition of tertiary course has been made for flying school courses only and you are not supplying flying school courses. Therefore, you are not supplying a tertiary course under paragraph (b) of the definition of tertiary course.

Hence, you are not supplying tertiary courses.

Professional or trade courses

Professional or trade 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

Essential prerequisite is defined in 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 not industrial instrument for the 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.

Industrial instrument means:

(a) an Australian law, or

(b) an award, order, determination or industrial agreement in force under an Australian law.

Paragraph 61 of GSTR 2003/1 of the GST Act states:

61. The capacity of a professional or trade association to impose a qualification would require some threat of legal sanction or penalty.

Paragraph 98 of GSTR 2003/1 discusses courses that lead to qualifications that are essential prerequisites for maintaining the practice of professions or trades. It 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.

Paragraph 100 of GSTR 2003/1 states:

100. Where your course leads to a qualification that is an essential prerequisite for entry to, or for the commencement of, the practice of a particular profession or trade, and is also a course that may be undertaken for maintenance purposes, the course will still be a professional or trade course.

Some of your courses are in the nature of continuing professional development courses only and they are done only by people already working in associated occupations.

There is no law or legal requirement that one have the qualifications one receives on successful completion of any of the courses in order to enter or commence the practice of a particular profession or trade.

There is no professional or trade association that can impose a penalty on someone who enters or commences the practice of the relevant professions or trades without holding the relevant qualifications.

Therefore, none of the courses leads to a qualification that is an essential prerequisite to enter or commence the practice of a particular profession or trade in Australia. Hence, the courses are not professional or trade courses.

Your courses are not any other type of education course listed in section 195-1 of the GST Act.

Hence, you do not make GST-free supplies under paragraph 38-85(a) of the GST Act.

There are no other provisions of the GST Act under which your make GST-free supplies.

Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied, your supplies of the courses are taxable supplies. Hence, GST is payable on your supplies of the courses.