Edited version of your written advice

Authorisation Number: 1012894131516

Date of advice: 13 October 2015

Ruling

Subject: GST and supplies first aid training courses

Question

Are the supplies of first aid training courses by an Australian entity (you) GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. Your supplies of first aid courses are not GST-free education courses under section 38-85 the GST Act:

• Your supplies of first aid courses are taxable supplies under section 9-5 of the GST Act and you are liable to pay GST on these supplies.

Relevant facts and circumstances

You are an Australian company which is registered for goods and services tax (GST).

You provide first aid training courses that comprise training in first aid, cardio-pulmonary resuscitation (CPR) and basic emergency care (basic life support).

The course is an accredited vocational education and training course that is specified in the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 (The Student Assistance Act Determination (No. 1999/2) (SAA Determination).

You are not a registered training organisation (RTO) nor approved by the relevant authority as a first aid course provider.

In your State or Territory, RTO is a body that is approved by the relevant authority to provide first aid courses.

You have entered into a licence agreement (Agreement) a RTO. You are referred as a "Training Agent" in the Agreement.

Under the agreement, you as a Training Agent is authorised by the RTO to organise and conduct training courses using the systems, material and training and assessment processes provided by the RTO.

Under the agreement, the Training Agent agrees to pay the RTO for goods and services in accordance with the RTO price schedule, which may be set from time to time. The RTO may charge a fee to audit each trainer, in accordance with the RTO price schedule.

You purchase course materials and Statement of Attainment (SOA) certificates from the RTO and pay a fee as per RTO's pricing schedule. You organise and conduct the course using the systems, materials and training and assessment processes provided by the RTO. You pay a licence fee to the RTO per SOA certificate.

The RTO issues tax invoices to you for SOA certificates and course materials.

The participants can enrol by going to the RTO's website and choose any of the training centres and enrol online or they can contact you directly to enrol.

The first aid training course fee is decided by you. You issue tax invoices to participants with your business name and Australian business number (ABN) for the first aid training course. You currently charge GST to clients for first aid training courses.

Once you have delivered the first aid training, you provide the necessary evidence to the RTO that the training was completed and request the RTO to issue participants with a certificate. You pay a licence fee to the RTO per SOA certificate. The RTO assesses and issues the SOA certificates to participants.

You do not receive any commission or fee from the RTO to act as a Training Agent for the RTO.

You have provided copies of the following documents:

• The RTO and Training Agent license agreement

• Training Manuel

• Statement of Attainment certificate

• Invoice issued to student by you with your ABN number;

• Tax invoice issued by the RTO and

• Price Schedule.

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

Note: where the term 'Australia' is used in this document, it is referring to the 'indirect tax zone' as defined in subsection 195-1 of the GST Act.

GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

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

(b) the supply is *connected with the indirect tax zone (Australia); and

(c) you are *registered or *required to be registered.

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

(*denotes a defined term in section 195-1 of the GST Act)

Your supplies of first aid training courses to the participants in Australia will be taxable if all the requirements in section 9-5 of the GST Act are satisfied.

From the facts given, the supplies of first aid training courses by you to the participants in Australia satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act, as follows: 

(a) you make the supplies of first aid training courses in return for consideration by way of payments;

(b) you make the supply in the course of your business;

(c) the services (courses) are performed/provided in Australia or made through an enterprise that you carry on in Australia (and therefore the supply is connected with Australia); and

(d) you are registered for GST in Australia.

However, section 9-5 of the GST Act also provides that the supply is not taxable to the extent that it is GST-free or input taxed. 

Your supplies of first aid training courses to the participants in Australia do not satisfy the input taxed provisions under the GST Act. The GST-free provisions are taken into consideration.

GST-free

A supply of an education course is GST-free under section 38-85 of the GST Act. An education course is defined in section 195-1 of the GST Act to include among other things; 

• a tertiary course;

• an adult and community education (ACE) course; and

• a professional or trade course.  

Each of the above courses is further defined under section 195-1 of the GST Act. 

Tertiary course

Goods and Services Tax Ruling GSTR 2001/1 discusses supplies that are GST-free tertiary courses. To be GST-free as a tertiary course, a course must be specified in the Education Ministers determination under subsection 5D(1) of the Student Assistance Act 1973 (The Student Assistance Act Determination (No. 2002/1)(SAA Determination).

The SAA Determination provides that an accredited vocational education and training course specified in the SAA Determination that is conducted by an RTO is a tertiary course.

Based on the facts provided, you are supplying an accredited vocational education and training course that is specified in the Ministers Determination. However, you are not a RTO; you have a licence agreement with the RTO. You pay licence fee for each certificate issued by the RTO. You also pay fees to the RTO for the course material. 

For the purpose of the Education Ministers Determination, it is not sufficient that the supply is made by the associate of a RTO; the course supplier itself must be the RTO. Were the entity acting as agent for the RTO, then the RTO would be making the supply of the course, and the requirement in the Education Ministers Determination would be satisfied.  

As you are not a RTO, we need to determine whether you are acting an agent for the RTO.

Agency relationship

Goods and Services Tax Ruling GSTR 2000/37 provides agency relationship.

Paragraph 28 of GSTR 2000/37 provides on what factors indicate that an agency relationship exists. These are:

• any description of you as an agent, having authority to act for another party, in agreement (expressed or implied) between you and the RTO;

• any exercise of the authority given to you that it is given to enter into legal relations with a third party;

• whether you bear any significant commercial risk;

• whether you act in your own name;

• whether you are remunerated for its services by way of commissions and whether you are entitled to keep any part of that remuneration secret from another party; and

• whether you decide the price of things it might sell to third parties.

Based on the facts provided, the Agreement between you and the RTO describes you as a "Training Agent". However, the Agreement does not give you any right or authority to enter into legal relationships with third parties (participants) on behalf of the RTO. You do not have any authority to enter into any agreements that bind the RTO.

You purchase course material from the RTO and pay fees to the RTO as per price schedule. You decide the course fee, source participants, collect fees and issue the invoice for the course using your own name and ABN. You organise and conduct the course using the systems, materials and training and assessment processes provided by the RTO.

Under the Agreement, the RTO is not responsible for any actions, claims, demands, losses, damages, costs, imposts, fines, charges, taxes and expenses in respect of or arising from loss. You bear any significant commercial risk for the business.

Furthermore, you are not remunerated for your services as a Training Agent by the RTO by way of commissions or any other fees.

Accordingly, the relationship between you and the RTO does not amount to an agency relationship. Therefore, as you are the supplier of the course and are not a RTO / nor are you acting as an agent for the RTO, the course does not satisfy the definition of a tertiary course in section 195-1 of the GST Act.

First Aid or Life Saving Course  

To be GST-free as a first aid course, as defined in section 195-1 of the GST Act, a course must satisfy both of the following requirements. 

First requirement  

Under section 195-1 of the GST Act, a first aid or lifesaving course must be one that principally trains individuals in one or more of the following:

i. first aid, resuscitation or other similar skills including personal aquatic survival skills, but not including swimming lessons

ii. surf life saving, or

iii. aero-medical rescue.  

You are supplying a first aid course that provides training in first aid, and cardio-pulmonary resuscitation (CPR). Therefore, your course satisfies the first requirement of the definition of first aid or life saving course in section 195-1 of the GST Act.  

Second requirement 

The first aid or life saving course must be provided by a body that is:

• registered (or otherwise approved) by a State or Territory authority that has the responsibility for registering (or otherwise approving) bodies that provide such courses, or

• approved to provide such courses by a State or Territory body that has responsibility for approving the provision of such courses.

Based on facts, you are not a RTO, nor are you registered or approved as a first aid course provider by the relevant State or Territory body or authority.

Furthermore, as discussed above, you are not acting as agent for your associated RTO. As the course does not satisfy the second requirement of the definition, it does not amount to a first aid or life saving course as defined in section 195-1 of the GST Act.

Accordingly, you are not making a supply of a tertiary course or a first aid or life saving course, nor are you making a supply of any other type of education course as defined in section 195-1 of the GST Act. Therefore, you are not making a GST-free supply under section 38-85 of the GST Act when you supply a first aid course.

Conclusion 

The supplies of your first aid training courses to participants in Australia do not satisfy the requirements of GST-free education courses under section 38-85 of the GST Act and are not GST-free. Furthermore, the supplies of your first aid training courses to participants in Australia do not satisfy any other GST-free provisions, nor is it input taxed under Division 40 of the GST Act.

Therefore, your supplies of first aid training courses to participants in Australia are taxable supplies under section 9-5 of the GST Act and are subject to GST.