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Ruling

Subject: GST and education courses

Question 1

Is the supply of the First Aid course a GST-free supply of education course when you deliver the courses to the students on behalf of a Registered Training Organisation (RTO)?

Answer

Yes

Question 2

Is the supply of 'Certificate IV in Occupational Health and Safety' course a GST-free education course?

Answer

Yes

Question 3

Is the supply of GST-free education courses (First Aid and Certificate IV in Occupational Health and Safety) on behalf of an RTO still GST-free when the courses are delivered to the public or business clients either at their premises or at a training venue supplied by you?

Answer

Yes

Relevant facts and circumstances

You are registered for goods and services tax (GST)

You are in the process of establishing a business which will entail you acting as a Training Partner of an interstate-based RTO.

In the initial stage of the business you will be offering specific training courses.

You intend to provide training to both individuals and groups (business, charity or educational establishment).

In the future you may provide training in certificate IV in Occupational Health and Safety.

To become a sub-contractor you have completed the following:

· a Certificate IV in Training and Assessment

· have qualifications and experience in the subject area

The courses above (courses) are accredited courses under the RTO registration.

You are responsible for the enrolment of the students and invoice the students directly for the training and qualification on behalf of the RTO as outlined in the agreement.

Upon completion of the assessments by the students, you forward the results to the RTO and notify the RTO of the students who have successfully completed the course. The RTO provides qualifications based on your assessment of the candidates.

The RTO then prepares and issues the certificates in their own name and under their RTO registration and then sends them back to you for issue to the students.

You will enter into an agreement (Agreement) with the RTO in relation to the delivery of the training courses above. The key parts of the Agreement are reproduced as follows:

· The RTO gives permission to you to deliver nationally accredited courses under the RTO's scope of registration through the Australian Skill Quality Authority as a RTO.

· The RTO has requested that you deliver the services referred to in the agreement.

You have has agreed to deliver the services upon and subject to the terms and conditions of the agreement.

The agreement recognises the responsibilities of each party to contribute to the broad strategies of a quality assured system as prescribed in the Standards for NVR Registered Training Organisations (SNR), made under the National Vocational Education and Training Regulator Act 2011. It also provides an agreed understanding of the operating arrangements that need to exist under SNR.

The RTO's client means a person, group of persons, company or other organisation that has engaged the RTO for provision of training, professional advice or other services.

The RTO's student means a person who has been enrolled in a nationally-recognised unit, accredited course or qualification with the RTO.

The sub-contractor is engaged by the RTO on a sub-contract basis. In delivering the sub-contractor's services under this agreement, the sub-contractor acts as the RTO's representative to the extent that the sub-contractor has direct contact with the RTO's students.

Services

The RTO agrees to provide the following services:

permission to deliver Nationally Recognised Units/Accredited Courses under the RTO's scope of registration;

Statements of Attainment for competencies achieved in these courses;

· access to Online Learning and Assessment systems;

· access to Workbook Theory Assessment systems;

· up-to-date teaching materials, including lesson plans, presentations,

Assessment tools and handouts as relevant per unit or accredited course;

· induction program for trainers;

· annual professional development for training staff;

The RTO accepts responsibility for:

· the provision of agreed services in a competent, ethical and professional manner;

· seeking to provide quality and value to the sub-contractor;

· notifying the sub-contractor in a timely manner of any concerns, issues or

· treating in confidence information obtained or provided in the course of

· issuing Statements of Attainment for Nationally Recognised Units of Competency or Accredited Courses achieved in the training programs in a timely manner;

· maintaining records of training and assessment delivery, learner results and

Statements of Attainment issued;

· conducting monitoring activities including examination of learner assessment

· evidence and site visits to observe training and assessment activities;

· approval of marketing material for courses being delivered under the RTO's

· scope of registration.

The sub-contractor agrees to faithfully and honestly deliver training and

· for which permission has been granted by the RTO to deliver under the RTO's scope & registrationin compliance with SNR requirements;

· in compliance with any statute proclamation notice in the Government Gazette, ordinance bylaw or other legislation, regulations, safety standards or licensing requirements;

· in accordance with the RTO's lesson plans, teaching methods and policies;

· in accordance with any reasonable directions which the RTO may give to the sub-contractor from time to time;

· in cooperation with other sub-contractors contracted to the RTO;

· at locations or such other locations as the RTO may from time to time authorise and/or instruct the sub-contractor;

· with the understanding that if at the RTO's request the sub-contractor delivers services to the RTO's client, the said client shall remain the RTO's client;

In accordance with the services description set out above, the sub-contractor agrees, in relation to the delivery of such services:

· to liaise with the RTO's staff as appropriate regarding learner training, SNR and industry requirements for all training programs.

· to provide timely and detailed planning of training programs to maximize the benefits from the quality assured training and assessment system;

· to communicate delivery arrangements to the RTO;

· to provide résumés, certified copies of trainer qualifications and other such documents as support the delivery arrangements to the RTO;

· to participate actively lithe monitoring and quality assurance process;

· to assess each course participant's level of competence;

· to only undertake the RTO's approved teachings and procedures;

· to transfer all questionnaires, evaluations and other feedback on the delivery of training and assessment to the RTO at least monthly;

4.5 The RTO reserves the right to sub-contract to other sub-contractors in locations where the sub-contractor delivers services and the sub-contractor will not make any claim against the RTO for compensation, cost or damages of any kind whatsoever because of other sub-contractors supplying and carrying out services in those locations.

Relevant legislative provisions

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

Section 9-5

Section 38-85

Section 195-1

Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2)

Regulations relating to the Dictionary in the GST Act: regulation 195-1.02

Schedule 12 of regulation 195-1.02

Reasons for decision

Question 1

Summary

It is considered that under the Agreement the education course is supplied by the RTO to the students and meets the requirements of section 38-85 of the GST Act to be GST-free.

Detailed reasoning

A supply is GST-free under section 38-85 of the GST Act if it is a supply of:

(a) an education course; or

(b) administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

The term education course is defined under section 195-1 of the GST Act. That definition includes a number of different courses. However, of those, the course you are proposing to supply could only fall into a first aid or life saving course.

The meaning of the term 'first aid or life saving course' is provided for in section 195-1 of the GST Act as follows:

first aid or life saving course means a course of study or instruction that:

(a) principally involves training individuals in one or more of the following:

(i) first aid, resuscitation or other similar life saving skills including personal aquatic survival skills but not including swimming lessons;

(ii) surf life saving;

(iii) aero-medical rescue; and

(b) is provided by an entity:

(i) that is registered (or otherwise approved) by a State or Territory authority that has responsibility for registering (or otherwise approving) entities that provide such courses; or

(ii) that is approved to provide such courses by a State or Territory body that has responsibility for approving the provision of such courses; or

(iii) (vi) that uses, as the instructor for the course, a person who holds a training qualification for that course that is a qualification (in life saving) specified in, or of a kind specified in, the regulations.

The regulations relating to the Dictionary in the Act further provides that:

195-1.02 First aid or life saving course

(1) For subparagraph (b)(vi) of the definition of first aid or life saving course in section 195-1 of the Act, the qualification specified is a qualification that:

(a) is provided by a registered training organisation under the National Training Framework; and

(b) certifies the attainment of all competencies mentioned in column 2 of the table in Schedule 2. with the unit codes mentioned in column 3 of Schedule 12.

(2) …

The course is an accredited vocational education and training course that is specified in the Education Minister's determination under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 - The Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (Determination).

To be GST-free as a first aid or life saving course, as defined in section 195-1 of the GST Act, regulation 195-1.02 the course must satisfy both of the following requirements.

First Requirement

The first aid or life saving course must be a course of study or instruction that principally involves training individuals in one or more of the following:

(i) a first aid, resuscitation or other similar life saving skills including personal aquatic survival skills but not including swimming lessons.

(ii) surf life saving; or

(iii) aero-medical rescue.

Second requirement

The first aid or life saving course must be provided by a body that is:

(i) registered (or otherwise approved) by a state or territory authority that has responsibility for registering (or otherwise approving) bodies that provide such courses; or

(ii) approved to provide such courses by a state or territory body that has responsibility for approving the provision of such courses.

Based on your description of the course and the material prepared by the RTO, it is considered that the course you deliver is a first aid course. We need to consider the second requirement that whether a RTO is making the supply.

In your State, a first aid course satisfies the second requirement of the definition in section 195-1 of the GST Act if it is provided by a RTO.

According to the registering body in your the training in first aid courses can only be provided by an RTO.

In your State, a registered training organisation (RTO) is a body that is approved by the relevant authority to provide first aid courses.

To be supplying a GST-free education course you must be the supplier of the course. Indicators of whether you are the supplier of the course include who administratively controls:

· the selection and enrolment of the participants,

· the course content, course accreditation and issue of any qualification,

· the regulations and procedures for the conduct of the course, and

· marketing and quality assurance of the course.

The agreement between you and the RTO provides that the RTO contracts you to provide the course.

In the Agreement between you and the RTO, it is the RTO that meets all the requirements of the supplier of the course as listed above notwithstanding that you also enrol the students before they are eligible for any qualifications.

We have considered the following factors, amongst others:

· You must provide the training and assessment services in accordance with the programme guidelines/training packages developed by and at the direction of the RTO.

· You must apply the RTO's policies regarding the enrolment procedures, fees and charges, induction, and recognition of prior learning as set out by government departments or the RTO.

· Promotional materials and advertising acknowledge the RTO and must be approved by them in accordance with their guidelines.

It is the RTO who is responsible for the overall management of the students enrolled in the programs, and ensure that all obligations to government departments are strictly adhered to.

Upon your final assessment of the students, it is the RTO's responsibility to issue the certificates (in their name and under their RTO registration) and return them to you for issue.

Upon perusal of the contractual arrangements between you and the RTO, we are of the view that it is the RTO who is providing, regulating and monitoring the courses that are provided to the students.

Consequently, when you deliver the training and assessment services under the agreement with the RTO, we consider that there are two supplies being made for GST purposes:

· you are making a supply of training and assessment services to the RTO from whom you receive consideration (in the form of the retained amount from the students fees), and

· the RTO is making a supply of the courses to the students. That is, the RTO is the course provider.

Therefore, the first aid course that you deliver under the agreement with the RTO to the students is considered to be supplied by the RTO and is GST-free under section 38-85 of the GST Act. Your supply of education services to the RTO are a separate supply and for GST purposes needs to be considered separately from the education course supplies made to the students.

Question 2

Summary

Similarly to the answer to question 1, the supply of the Certificate IV in Occupational Health and Safety is also GST-free.

Detailed reasoning

A supply is GST-free under section 38-85 of the GST Act if it is a supply of an education course.

The definition of 'education courses' in section 195-1 of the GST Act includes a number of different courses. However, of those, the course you are proposing to supply falls into tertiary courses.

To be GST-free as a tertiary course, as defined in section 195-1 of the GST Act, a course must be specified in the Determination. The Determination provides that an accredited vocational education and training course specified in the Determination that is conducted by an RTO is a tertiary course.

The Certificate IV in Occupational Health and Safety course is an accredited vocational education and training course that is specified in the Schedule 2 of the Education Minister's Determination under subsections 3(1) and 5D(1) of the Student Assistance Act 1973

The vocational education and training program is defined in the Determination as follows:

· means a course that leads to an award of an AQF qualification or a Statement of Attainment, and the course must be:

o an accredited vocational education and training course; or

o a sequence of training consisting of one or more subjects or modules where each subject or module is from an accredited vocational education and training course; or

o a structured approach to the development and attainment of competencies for a particular AQF qualification specified in an endorsed training package.

In column 2 of Schedule 2 of the Determination, Higher education institutions and RTO are acceptable education institutions to deliver vocational education and training programs.

Similar to the reasoning above, you deliver an accredited education course and it is the RTO that is providing, regulating and monitoring the courses that are provided to the students.

Therefore, the Certificate IV in Occupational Health and Safety course that you deliver under the agreement with the RTO to the students is considered to be supplied by the RTO and is GST-free under section 38-85 of the GST Act. Your supply of education services to the RTO are a separate supply and for GST purposes need to be considered separately from the education course supplies made to the students.

Question 3

Summary

Where an education course is GST-free under section 38-85 of the GST Act, who pays for the course and where it is held does not change the GST-free status of the supply.

Detailed reasoning

Whether GST applies when an entity (employer, charity organisation) contracts with a training organisation to present a training course to their staff (members) would depend on the following criteria:

· the provider of the course should look at the terms of their engagement - is the engagement a contract to provide services or is it a contract to provide a GST-free course?

· if the course retains its accreditation status (i.e. the RTO delivers an accredited vocational education course), the supply of the course to employees on the request of the entity is GST-free.

· where training is provided at the request of an entity for employees of that entity and the course/training session is tailored to suit the needs of the entity, the supply of the course will be subject to GST.

You have provided that:

· the engagement between you and the entity is a contract for training, delivery of a GST-free course.

· the course is an accredited course (under the agreement with the RTO).

The course is strictly an accredited course without modification (as agreed under the agreement with the RTO)

Therefore, the supply of the courses will remain GST-free regardless of the location of the courses or who is liable to pay for the courses.

Note that your supply of education services to the RTO are a separate supply and for GST purposes need to be considered separately from the education course supplies made to the students and other entities.