Edited version of your private ruling

Authorisation Number: 1012449273698

Ruling

Subject: GST and education courses

Question:

Is the supply of your web-based education course a GST-free education course?

Answer:

No, the supply of your web-based education course is not a GST-free education course. The supply is a taxable supply.

Relevant facts and circumstances:

Entity A (you) is registered for the goods and services tax (GST). You are neither a Registered Training Organisation (RTO) nor recognised as a primary school, secondary school, special school or a higher education institution under a State law.

You have developed an interactive web-based educational resource (course) which you supplied directly to schools. Teachers and students at these schools will use interactive the web-based educational course.

The course is a game based on sequential learning and details of how it works are in your brochure.

You advised you do not provide professional or trade course or adult and community education (ACE) course when supplying the interactive web-based educational course.

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:

You are liable for GST when you make a taxable supply. You make a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if:

(1) you make the supply for consideration;

(2) the supply is made in the course or furtherance of an enterprise that you carry on;

(3) the supply is connected with Australia; and

(4) 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.

Supply of the course

From the facts given, you satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act as:

(1) you receive consideration for the supply of the course;

(2) the supply is made in the course of a business that you carry on;

(3) the supply is connected with Australia as the supply is made through a business that you carry on in Australia; and

(4) you are registered for GST.

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

There is no provision in the GST Act that will make the supply of the course input taxed. The next step is to determine whether the supply of the course is GST-free under section 38-85 of the GST Act since it is an online educational resource used by teachers and students at schools.

GST-free education course

The supply of an education course is GST-free under section 38-85 of the GST Act.

The term 'education course' is defined in the GST Act to include (amongst other things):

· a primary course; or

· a secondary course; or

· professional or trade course; or

· adult and community education (ACE) course.

You advised that you do not provide professional or trade course or ACE course when you supply the course. Therefore, what remains is to determine whether you provide a primary or secondary course under section 38-85 of the GST Act.

Primary course

Paragraphs 19 to 22 of GSTR 2000/30 provide guidance on 'primary course' and state:

19. A primary course means:

(a)   a course of study or instruction that is delivered:

(i) in accordance with a primary curriculum recognised by the education authority of the State or Territory in which the course is delivered; and

(ii) by a school that is recognised as a primary school under the law of the State or Territory; or

(b)   any other course of study or instruction that the Education Minister has determined is a primary course for the purposes of this Act.

20. A primary course is any course delivered by a school in accordance with the primary curriculum recognised by the education authority of the State or Territory. A school, as defined in the GST Act, is an institution approved by the education authority of a state or territory, to conduct a primary course.

21. In practice, schools may vary the delivery of the primary curriculum. In these circumstances, the school curriculum is still a primary course.

22. Regardless of whether a course of study or instruction meets the requirements of paragraph (a) of the definition of primary course, the Education Minister can determine that a course is a primary course for the purposes of the GST Act.

To be GST-free as a primary course, a course must be delivered in accordance with a primary curriculum recognised by the education authority in the State or Territory in which the course is delivered and by a school that is recognised as a primary school under the law of that State or Territory.

You confirmed you are not an RTO and are not recognised as a primary school under a State law. In this instance, your supply of the course does not satisfy the definition of a 'primary course' and it is not GST-free as a primary course.

Secondary course

Paragraphs 23 to 27 of GSTR 2000/30 provide guidance on 'secondary course' and state:

23. A secondary course means:

(a)   a course of study or instruction that is a secondary course determined by the Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act; or

(b)   any other course of study or instruction that the Education Minister has determined is a secondary course for the purposes of this Act.

24. Under the Education Minister's determination, a secondary course can be delivered by a recognised secondary school, a registered training organisation, a higher education institution or a special school.

25. A secondary course includes all secondary courses covered by the determination made by the Education Minister under the Student Assistance Act 1973 .This determination is also used to identify those courses that students must be undertaking to be eligible for income support as full-time students. The determination lists the type of course and types of educational institutions that can deliver the course. The eligibility of courses for the Student Assistance Act 1973 is reviewed periodically by the Education Minister.

26. Apart from any determination referred to in paragraph (a) of the definition of a secondary course, the Education Minister can determine that any other course of study or instruction is a secondary course for the purposes of paragraph (b) of the definition.

27. Only courses covered by the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 or under a separate determination, are GST-free as secondary courses.

28. It is considered that reference to subsection 5D(1) of the Student Assistance Act 1973 includes both paragraphs (a) and (b) of that subsection and a secondary course includes a part of a course of study or instruction. Therefore parts of a secondary course including the study of one subject or module are covered by the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 and are GST-free.

To be GST-free as a secondary course, a course must satisfy the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 (Education Minister's Determination No.2002/1).

Determination No 2002/1 provides that an accredited secondary course, conducted by a secondary school, is a secondary course.

Based on the information received, you are not an education institution as specified in the Education Minister's Determination No. 2002/1 (that is, you are not a secondary school, registered training organisation, higher education institution or a special school) .Therefore, your supply of the course does not satisfy the definition of a 'secondary course' and it is not GST-free as a secondary course.

Conclusion

Your supply of the course is not an education course within the meaning of the GST Act and is therefore not GST-free. Your supply of the course to schools is a taxable supply under section 9-5 of the GST Act and you will be liable to pay GST on the supply.