Edited version of your private ruling

Authorisation Number: 1012612488552

Ruling

Subject: GST and Education Courses

Question

Is your supply of the training courses a GST-free supply of an education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, the supply of the training courses is a GST-free supply of an education course under section 38-85 of the GST Act. Each course meets the requirements of an Adult and Community Education (ACE) Course for the purposes of section 38-85.

Relevant facts and circumstances

You are an association with a member base who pay an annual membership fee.

Your website advises you provide a range of services which include training.

You are a not for profit organisation registered for goods and services tax (GST) with effect from 1 July 2000.

You are currently registered as a Registered Training Organisation (RTO).

Your training courses are open to both members and non-members. Both members and non-members attend the training courses. Non-members pay a slightly higher registration fee to attend the training courses.

Certain training courses are not accredited courses or units of competency. Further, they are not delivered within the scope of your or any other body's RTO registration, are not nationally recognised and do not provide formal qualifications.

These training courses have been developed by you to assist participants to gain employment or for existing employees to advance their career.

These courses are advertised on the internet via your website and also in paper brochures. Courses, course content, costs, times, venue, registration forms and terms and conditions are available. All of the courses are available to the general public.

There are no entry prerequisites imposed on any of these courses and entry is not restricted to any particular group.

Upon completion of any of these courses, a participant receives a certification for that training course.

Qualified trainers are used.

None of the training courses are accredited at Masters or Doctoral level.

You are not a higher education institution or a non-government higher education institution.

None of the training courses have been separately determined by the Education Minister to be a 'tertiary' course for the purposes of the GST Act.

None of the training courses lead to a qualification that is an essential prerequisite for entry to, or to commence the practice of a profession or trade in Australia.

You advise you are recognised and registered as a provider of ACE courses by a State or Territory authority.

You have not been refused recognition or disqualified by a State or Territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

You do not provide any of the training courses on behalf of another body.

The courses are not provided by, or at the request of an employer solely to the employees of that employer, nor are the courses provided by, or at the request of an organisation for its members only.

None of the courses are provided by way of private tuition to an individual.

Relevant legislative provisions

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

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

Reasons for decision

Summary

Each training course is considered to meet the requirements of an ACE Course and therefore meets the definition of an 'education course' for the purposes of section 38-85 of the GST Act. Consequently the supply of each training course is GST-free.

Detailed reasoning

Section 38-85 of the GST Act provides that a supply of an 'education course' is GST free.

The term 'education course' is defined in section 195-1 of the GST Act to include among other things, a tertiary course and an ACE course.

Section 195-1 of the GST Act provides that a 'tertiary course' is:

• 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

• a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-governmental 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.

Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) (Determination 2009/2) provides that an accredited vocational and education training (VET) course which is delivered by a higher education institution or by and within the scope of the registration of an RTO is a 'tertiary course'.

You are not a higher education institution or a non-government higher education institution. While you are an RTO, based on the information provided by you, certain courses are not accredited tertiary courses under the scope of your registration. None of the courses are accredited at Masters or Doctoral level nor are any of the courses separately determined by the Education Minister to be a tertiary course. As such, these training courses are not GST-free tertiary courses.

Section 195-1 of the GST Act and the Education Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (Education Minister's Determination 2000) provides that an ACE course means a course of study or instruction that is:

1. likely to add to the employment related skills of people that undertake the course

2. of a kind determined by the Education Minister to be an ACE course, and

3. be provided by, or on behalf, of a body that is:

• either a higher education institution

• or is recognised or funded by a State or Territory authority as a provider of ACE courses as described in the Education Minister's Determination 2000, or

• a body corporate operating on a not-for-profit basis that has not been refused recognition, or disqualified, by a State or Territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

Goods and Services Tax Ruling GSTR 2000/27 provides guidance on GST, adult and community education courses, and the meaning of 'likely to add to employment related skills'.

Where a course meets the following requirements we consider it meets this test:

1. it is directed at people who want to add to their employment related skills

2. the objectives of the course specify the employment related skills that participants will acquire in undertaking the course

3. the means of imparting the skills to the participants are clearly identified prior to the commencement of the course, and

4. there is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours.

These courses were developed to improve participants' workplace skills and performance. The courses are not for recreational, hobby, artistic or cultural purposes. Your website directs interested people to your courses and provides information about each course. You also distribute paper brochures containing the same information. Each course has clear objectives and outcomes. We therefore consider that all of these particular courses are likely to add to the employment related skills of people undertaking the course.

The second requirement for an ACE course is that it must be of a kind determined by the Education Minister to be an ACE course. At subsection 5(2) of the Education Minister's Determination 2000, the Education Minister states that an ACE course must:

a) not meet the criteria for any other 'education course' defined in section 195-1 of the GST Act, and

b) be available to adults in the general community, and

c) not be provided by, or at the request of an employer to the employees of that employer, and

d) not be provided by, or at the request of an organisation to the members of that organisation, except an organisation for which membership is open to adults in the general community, and

e) not be a course that is provided by way of private tuition to an individual.

These courses do not meet the criteria for any other 'education courses'. All of the courses are advertised on the internet via your website and also advertised by paper brochure. There is no entry prerequisites imposed on any of the courses and entry is not restricted to any particular group. The courses are available to the general public, and both members and non-members attend the courses. These courses are not specifically provided by or at the request of an employer only to the employees of that employer, or by or at the request of an organisation for its members only. Nor are any of the courses provided by way of private tuition to an individual. Therefore the second requirement for an ACE course is met by all these particular courses.

With respect to the third requirement set out above, you are a body corporate operating on a not-for-profit basis that has not been refused recognition, or disqualified, by a State or Territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

Consequently each of these training courses are considered to meet the requirements of an ACE course and as such will be GST-free under section 38-85 of the GST Act.