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Edited version of your written advice
Authorisation Number: 1012672408950
Ruling
Subject: GST and fees for skills assessment
Question 1
Are payments made to Entity A for processing assessment applications consideration for a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Question 2
Are payments made by Entity A to an education institution consideration for a taxable supply under section 9-5 of the GST Act?
Question 3
Are payments made by Entity A to a contracted education institution consideration for a taxable supply under section 9-5 of the GST Act?
Answer 1
No, the payments made to Entity A for processing applications for assessments are not consideration for a taxable supply as the payments are for GST-free supplies under section 38-110 of the GST Act.
Answer 2
Yes, the payments made by Entity A to an education institution are consideration for a taxable supply under section 9-5 of the GST Act.
Answer 3
No, the payments made by Entity A to a contracted education institution are not consideration for a taxable supply as the payments are for GST-free supplies under section 38-110 of the GST Act.
Relevant facts and circumstances
Entity A is registered for goods and services tax (GST).
Entity A makes payments to an education institution who provides managing services to the Department.
Entity A makes payments to an education institution that it has contracted to provide assessment services.
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 subsection 38-110(1)
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-110(2)
A New Tax System (Goods and Services Tax) Act 1999 section 81-10
A New Tax System (Goods and Services Tax) Act 1999 section 81-15
Reasons for decision
Unless otherwise stated, all legislative references in this Ruling are to the A New Tax System (Goods and Services Tax) Act 1999.
A supply is a taxable supply if, pursuant to section 9-5 :
• an entity makes a supply for consideration
• the supply is made in the course or furtherance of an enterprise that the entity carries on
• the supply is connected with Australia, and
• the entity is 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.
It is considered that Entity A makes a supply for consideration and it is made in the course of its enterprise, its supply is connected with Australia and is registered for GST. Therefore Entity A will be making a taxable supply unless it is GST-free or input taxed.
GST-free
Subsection 38-110(1) provides that a supply is GST-free when the supply is the assessment or issue of qualifications for the purpose of:
(a) access to education
(b) membership of a professional or trade association
(c) registration or licensing for a particular occupation, or
(d) employment.
Entity A is making GST-free supplies under section 38-110 when either Entity A or the contracted education institution assesses the skills for the purposes listed in subsection 38-110(1).
Question 2 - Payments made by Entity A to educational institution
The payments made by Entity A to an education institution are consideration for a supply, they are payments received for a supply made in the course of its enterprise, the supply is connected in Australia and the education institution is registered for GST. As such, the payments made by the Department will be payments for a taxable supply.
Question 3 - Payments made by Entity A to education institution
The contracted education institution is making GST-free supplies under section 38-110 when it assesses the skills for the purposes listed in subsection 38-110(1).