Edited version of your written advice

Authorisation Number: 1012861667770

Date of advice: 25 August 2015

Ruling

Subject: GST-free supply of and education course

Question 1

Is the supply of training course 1 GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. Training course 1 is not GST-free under section 38-85 of the GST Act.

Question 2

Is the supply of training course 2 GST-free under section 38-85 of the GST Act?

Answer

No. Training course 2 is not GST-free under section 38-85 of the GST Act.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You, Entity A, develop and provide courses as well as providing courses developed by others. You have been accredited by Entity B to provide training course 1 (TC1) and training course 2 (TC2).

The successful completion of these courses gives the participants an accreditation that is recognised nationally and internationally.

You previously received a private ruling for the same two courses and have now provided further relevant facts that were not previously provided and wish to include these and the facts and circumstances previously supplied for consideration towards your current application.

Further facts

For both TC1 and TC2 you use a trainer who holds a training qualification from an organisation. This qualification enables the trainer to teach and assess CPR which is the core skills in TC1 and TC2.

You supplied a copy of the detailed course programs for each of TC1 and TC2.

By way of a phone conversation with your representative it was confirmed that the qualification held by the trainer from the organisation was not in it self a sufficient qualification to teach TC1 and TC2 but the trainer was otherwise qualified to teach TC1 and TC2.

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

Reasons for decision

The supply of an education course is GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). An education course is defined in section 195-1 of the GST Act and includes a professional or trade course and a first aid or life saving course.

Professional or trade course

A professional or trade course is defined by section 195-1 of the GST Act as a course leading to a qualification that is an essential prerequisite:

(a) for entry to a particular profession or trade in Australia; or

(b) to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.

Goods and Services Tax Ruling GSTR 2003/1 Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1) provides the Commissioner’s view on professional or trade courses.

Of relevance, paragraph 9 of GSTR 2003/1 states:

For the purposes of the definition of a 'professional or trade course the term 'essential prerequisite' is defined in section 195-1 in the following terms:

'a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed:

(a) by or under an industrial instrument; or

(b) if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or

(c) if neither paragraph (a) nor (b) applies but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association.'

TC1 and TC2 do not lead to the “entry into or commencement of” the profession or trade concerned, as TC1 and TC2 are aimed at healthcare professionals already working in their respective professions.

Therefore, TC1 and TC2 are not an essential prerequisite for the entry into, or the commencement of a profession or trade and are not a professional or trade course for the purposes of the GST Act.

First aid or life saving course

A first aid or life saving course is also defined in section 195-1 of the GST Act:

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; and

…

(b) is provided by an entity:

(i) ...

(ii) …

(iii) that uses, as the instructor for the course, a person who holds a training qualification for that course that was issued by Austswim Limited (ACN 097 784 122); or

(iv) that uses, as the instructor for the course, a person who holds a training qualification for that course that was issued by Surf Life Saving Australia Limited (ACN 003 147 180); or

(v) 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.

(vi) …

TC1 and TC2 provided by you aim to train healthcare personnel in life saving skills and therefore, these courses satisfy paragraph (a) of the definition.

However, to be GST-free, paragraph (b) of the definition must also be satisfied. The Explanatory Memorandum to the Taxation Laws Amendment Bill (No. 9) 2003 (EM) outlines that the purpose of paragraphs b(iii) to (v) of the definition of ‘first aid or life saving courses’ was to provide an alternative to requiring bodies to be registered or approved:

1.9 A supply of an eligible life saving course will be a GST-free supply if the supplier uses an instructor that holds a training qualification that was issued by either of Austswim Limited, Surf life Saving Australia Limited or The Royal Life Saving Society - Australia.

1.10 The issue of a training qualification by one of the three life saving organisations to the course instructor represents an acceptable alternative to the need for the supplier of the relevant life saving course to be registered or approved by a State or Territory body or authority to conduct the relevant course.

1.11 What constitutes a 'training qualification' is not specified in the GST Act. The three life saving organisations conduct a number of training courses that enable persons to obtain a qualification suitable to the conduct of life saving courses. An example of a relevant qualification is the Austswim Teacher of Swimming and Water Safety award issued by Austswim Limited.

1.12 The training qualification held by the instructor must directly relate to a life saving course to which paragraph (a) of the definition of first aid or life saving course in section 195-1 of the GST Act applies. For example, the supplier of an aquatic survival skill course would need to use an instructor that holds a training qualification relevant to that course in order to treat the supply of the course as a GST-free supply.

The definition of ‘first aid or life saving course’ provide that ‘a course’ that is provided by an entity ‘that uses, as the instructor for the course, a person who holds a training qualification for that course’ will be a first aid or life saving course. In this case, the course that is referred to is TC1 and TC2.

You as the course supplier use a trainer for TC1 and TC2 that holds a training qualification issued by an organisation referred to in paragraphs (b)(iii), (iv) or (v) of the definition of ‘first aid or life saving course’ of the GST Act as outlined above (the organisation). The training qualification issued by the organisation to the trainer is to teach the organisation’s course and not TC1 and TC2 provided by you.

Further, you have advised that the training qualification provided by the organisation is not in itself a sufficient qualification to teachTC1 and TC2. An instructor of TC1 and TC2 is required to (amongst other qualifications including a CPR training course such as that issued by the organisation) have completed other TC1 and TC2 instructor training and qualification. Such a training qualification is issued by you and not by an organisation referred to in paragraphs (b)(iii), (iv) or (v) of the definition of ‘first aid or life saving course’ of the GST Act as outlined above.

Therefore as the organisation does not issue a training qualification to teach TC1 and TC2, the requirement in the definition of first aid and lifesaving courses as set out in the GST Act is not met and your supply of TC1 and TC2 is not GST-free.