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Edited version of private advice
Authorisation Number: 1012656508859
Ruling
Subject: Trade skills assessments.
Question
Is the entity, a training organisation, making a GST-free supply under section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it assesses trade skills for Australian residents?
Answer
Yes, the entity is making a GST-free supply under section 38-110 GST Act, when it assesses trade skills for Australian residents.
Relevant facts and circumstances
• You are a registered training authority under a state registrations and qualifications authority (the authority).
• The authority is a training recognition authority in an Australian state in accordance with the Australian Recognition Framework.
• You are registered for the goods and services tax (GST).
• You provide trade skills assessment services to persons wishing to migrate to Australia or wish to come to Australia under temporary worker provisions (i.e. 457 Visa Category).
• The services are provided to both Australian residents and to individuals living overseas.
• You assess your clients' (applicants') trade skills and your assessments include practical skills demonstration by applicants.
• You issue an Australian qualification to certificate level to successful applicants.
• The assessments you carry out for Australian residents is for purposes listed in subsection 38-110(1) of the GST Act.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 - Section 38-110
Reasons for decision
A supply is GST-free under subsection 38-110(1) of the GST Act when the supply is the assessment or issue of qualifications for the purpose of:
• access to education
• membership of a professional or trade association
• registration or licensing for a particular occupation, or
• employment.
You supply services of either assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills. Your assessment is for any of the purposes listed in subsection 38-110(1) of the GST Act.
Subsection 38-110(2) of the GST Act provides that a supply is not GST-free under subsection 38-110(1) of the GST Act unless the supply is carried out by:
• a professional or trade association
• an education institution
• an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services
• an authority of the Commonwealth or of a State or Territory, or
• a local government body.
You are registered by a state registrations and qualifications authority, a training recognition authority of the State of Australia, which is listed in the website "training.gov.au" (an initiative of the Australian and State and Territory governments) under registration number 21097. Therefore, the supplies you make are not excluded from being GST-free under subsection 38-110(2) of the GST Act.
Accordingly, you are making GST-free supplies under section 38-110 of the GST Act when you assess the qualifications of persons for the purposes listed in subsection 38-110 (1) of the GST Act.