Edited version of your written advice

Authorisation Number: 1012913257297

Date of advice: 17 November 2015

Ruling

Subject: GST and supply of training courses

Question 1

Is your supply of the 5 day training course a GST-free education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. Your supply of the 5 day training course is a taxable supply under section 9-5 of the GST Act.

Question 2

Is your supply of the one day refresher training course a GST-free education course under section 38-85 of the GST Act?

Answer

No. Your supply of the one day refresher training course is a taxable supply under section 9-5 of the GST Act.

Question 3

Is there some other section or legislation or Australian Taxation Office (ATO) agreement that makes these training courses GST-free?

Answer

No. There is no other section or legislation or ATO agreement that makes these training courses GST-free.

Relevant fact

You are a registered training organisation and registered for goods and services tax (GST).

You supply A 5 day training course and a one day refresher training course. The courses meet the requirements of the relevant Regulations elected under the specific Act. The Act and regulation provide a National legal framework form where the States, Territories and the Commonwealth are required to implement their own related legislation.

The 2 courses are not under the scope of any RTO and therefore cannot be delivered as an RTO course. They are not courses accredited by ASQA (the national regulator of RTOs) and are not part of any endorsed Training Package in the Vocational Education and Training (VET) system.

The training courses are advertised on the internet, in trade magazines and in bulk faxes and bulk mail to companies. You do not usually promote the two training courses to the general community because people who are not in the workforce do not usually have a need for it.

The courses are either provided at the employer's workplace or you organise public courses yourself for people to attend. Either way the employers or the people at the public courses contract with you to provide the courses. The fees paid by the employers and the public course attendees are paid directly to you.

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 decisions

Question 1, 2 and 3

GST is payable on a taxable supply. Under section 9-5 of the GST Act, an entity makes a taxable supply if:

(a) the supply is made for consideration; and

(b) the supply is made in the course or furtherance of an enterprise that the entity carries on; and

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

(d) the entity is registered for GST.

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

Your supply of the two training courses satisfies paragraphs 9-5(a) to 9-5(d) of the GST Act as:

(a) you make the supply for consideration; and

(b) the supply is made in the course of an enterprise that you carry on in Australia; and

(c) your supply is connected with Australia as the courses are done through an enterprise that you carry on in Australia; and

(d) you are registered for GST.

However, your supply of the training courses is not a taxable supply to the extent that it is GST-free or input taxed.

There is no provision under the GST Act that makes your supply of the two training courses input taxed.

GST-free supply

Relevant to your supply of the training courses is paragraph 38-85(a) of the GST Act. Under paragraph 38-85(a) of the GST Act a supply of an education course is GST-free.

'Education course' is defined in section 195-1 of the GST Act to include, amongst other things:

• a tertiary course

• an adult and community education course, or

• a professional or trade course.

Tertiary course

Unser section 195-1 of the GST Act, a 'tertiary course' means:

(a) a course of study or instruction that is a tertiary course determined by the Education Minister⁵ under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act; or

(aa) a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-government higher education institution; or

(b) any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act

Goods and Services Tax Ruling GSTR 2001/1 provides guidance in determining when a course is a tertiary course for GST purposes.

To be GST-free as a tertiary course, a course must satisfy the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 (Education Minister's Determination No 2002/1).

The Education Minister's Determination No 2002/1 provides that an accredited vocational education and training program delivered by a RTO, is a tertiary course.

The two training courses that you are conducting are not currently listed in your scope of RTO registration. Therefore, the two training courses are not a course as specified in the Education Minister's Determination No. 2002/1.

Accordingly, your two training courses are not a 'tertiary course' as defined in section 195-1 of the GST Act and therefore are not GST-free education course under paragraph 38-85(a) of the GST Act.

Adult and community education (ACE) course

Under section 195-1 of the GST Act, an 'ACE course' is a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and:

(a) is of a kind determined by the Education Minister to be an adult and community education course and is provided by, or on behalf of, a body:

i. that is a higher education institution; or

ii. that is recognised, by a State or Territory authority, as a provider of course of a kind described in the determination; or

iii. that is funded by a State or Territory on the basis that it is a provider of courses or a kind described in the determination; or

(b) is determined by the Education Minister to be an adult and community education course.

Goods and Services Tax Ruling GSTR 2000/27 provides guidance in determining which supplies of ACE courses are GST-free under paragraph 38-85(a) of the GST Act.

To be a GST-free ACE course, a course must:

• be likely to add to the employment related skills of people undertaking the course; and

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

• be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses 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.

To satisfy the definition of an ACE course the course must meet the requirements of the Education Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (ACE Determination). At paragraph 5(2) of the ACE Determination, the Education Minister states that an ACE course must:

• not be any other education course defined in section 195-1 of the GST Act;

• be available to adults in the general community;

• not be provided by or at the request of an employer to employees of that employer;

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

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

Based on the information you have provided it is not accepted that your two training courses satisfy the criteria outlined above because:

• to be available to adults in the general community the course must be genuinely available to most adults in the general community. One way of determining this is to look at how the course is advertised. Your course is advertised on the internet, in trade magazines, and through bulk faxes and bulk mail to companies. You have stated that you do not usually promote it to the general community because people who are not in the workforce do not usually have a need for it. As such, it does not appear that the course is available to adults in the general community.

• in addition, the course is provided at the request of an employer to employees of that employer and at the request of an organisation to members of that organisation.

Your two training courses therefore do not satisfy the definition of 'ACE course' as defined in section 195-1 of the GST Act and therefore, are not GST-free education courses under paragraph 38-85(a) of the GST Act.

Professional or trade courses

'Professional or trade courses' are defined in section 195-1 of the GST Act to mean 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.

In relation to the 'entry to, or the commencement of the practice of a particular profession', section 195-1 of the GST Act provides that a qualification will be an essential prerequisite where:

• the course is a legal requirement for example a law, regulation or industrial agreement, or

• the course is a requirement imposed by a professional or trade association, either nationally or on a State basis.

Goods and Services Tax Ruling GSTR 2003/1 provides guidance on when a course meets the requirements of GST-free professional or trade courses as defined in section 195-1 of the GST Act.

According to paragraph 96 in GSTR 2003/1, there are numerous industrial instruments that require a person to obtain approval or certification before a particular tasks or duty in an occupation can be undertaken. The fact that there is such a requirement does not necessarily mean that the particular task or duty is a separate profession or trade. If the qualification merely relates to the undertaking of a duty or task in a profession or trade, a course leading to that qualification is not a professional or trade course. The qualification is not an essential prerequisite.

Paragraph 97 in GSTR 2003/1 provides an example, which is similar to your situation:

Example 10 - a course that fulfils a legal requirement in relation to a task

97. The Workplace Safety Act of a State requires that a person be appointed as a health and safety officer in a workplace of more than thirty people. Any person, including the employer, may perform this role if he or she is approved to do so. The individual performs their normal duties in the workplace and the role as a safety officer is merely an additional task. The legislation places the obligation on the employer to satisfy this requirement. The legal constraint does not relate to a person entering a profession or trade. A course you run to train a person to perform such a role is not a professional or trade course.

Referring to example 10, the two training courses that you provide are not considered to be a 'Professional or Trade courses' as the qualification is not an essential requisite for any profession or trade. The certificate allows the appointed to undertake the role in addition to their normal duties and, confirms that the employer has satisfied the legislative requirement under the relevant Act.

Accordingly, your two training courses are not a 'professional or trade courses' as defined in section 195-1 of the GST Act and therefore are not GST-free education courses under paragraph 38-85(a) of the GST Act.

Summary

There are no other provisions under the GST Act that make your supply of the two training courses GST-free. In addition the ATO does not have any agreement that will make your two training courses GST-free.

Your supply of the two training courses is a taxable supply under section 9-5 of the GST and therefore subject to GST.