| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1013019873530
Date of advice: 18 May 2016
Ruling
Subject: GST and supply of education courses
Issue 1
Is a supply of the Diploma course by you to individuals in Australia subject to GST?
Answer 1
No, your supply of the Diploma course is GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Issue 2
Is a supply of an individual unit of the Diploma course by you subject to GST?
Answer 2
No, your supply of an individual unit of the Diploma course is GST-free under section 38-85 the GST Act.
Issue 3
Is your supply of an unaccredited short course to individuals in Australia subject to GST?
Answer 3
Yes, your supply of unaccredited short course is a taxable supply under section 9-5 of the GST Act and therefore subject to GST.
Relevant facts and circumstances
You are an Australian company which is registered for goods and services tax (GST).
You are a registered training organisation (RTO).
You supply a Diploma course and an unaccredited short course to individuals in Australia.
The Diploma course is accredited course and listed on the national training database.
The Diploma course comprises 9 units of study. A student can enrol in one or more units, either with or without the intention to complete all units and qualify for the diploma.
There are pre-requisites to enrol in the Diploma course.
Some students are overseas based and complete the online component in their country of residence and travel to Australia to complete the practical component.
The course is conducted via the following:
• Online component with online assessment;
• Practical component involving 3-5 days attendance at your headquarters
The Diploma course can be completed on a full or part time basis, or per unit.
In addition to the Diploma course fee, the following costs are changed to students;
You will issue the Diploma course certificate to students who have successfully completed all units of the course.
There is no pre-requisite to enrol in the unaccredited short course. The course is approximately one hour in length and is conducted online.
The course is considered an introduction to the topic and to benefit people who may already be working in the industry.
The course is open to adults in the general community.
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
Issue 1
Note: where the term 'Australia" is used in this documents, 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
(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
(c) the supply is *connected with the indirect tax zone (Australia); and
(d) 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 supply of the Diploma course 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 supply of the Diploma of Equitation Science course by you to the participants in Australia satisfies paragraphs 9-5(a) to 9-5(d) of the GST Act, as follows:
(a) you make the supply of the Diploma course in return for consideration by way of payments;
(b) you make the supply in the course of your business;
(c) the service (course) 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.
The supply of the Diploma course by you is not input taxed under any provisions of the GST Act or any other legislation.
The next step is to determine whether the supply is GST-free.
GST-free
A supply of an education course is GST-free under section 38-85 of the GST Act.
Education course is defined in section 195-1 of the GST Act. The definition lists various types of education courses, including:
• tertiary courses
• professional or trade courses, and
• adult and community education courses
The other types of education course are not relevant to this case.
Tertiary course
Section 195-1 of the GST Act defines tertiary course as:
(a) a course of study or instruction that is a tertiary course determined by the
*Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act……..
The Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973, namely the Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (Minister's Determination), states:
(1) For the purposes of paragraph 5D(1)(a) of the Student Assistance Act 1973, a tertiary course is a full-time course:
(a) specified in Column 1 of the table in Schedule 2 to this instrument that is provided by an education institution specified for that course in Column 2 of that table; or
(b) that is:
(i) accredited at Masters level; and
(ii) specified in Column 2 of the table in Schedule 3 to this instrument; and
(iii) provided by the education institution specified for that course in Column 1 of that table.
(2) Without limiting subsection (1), a course that meets the requirements of paragraphs (1)(a) and (b) and is not a full-time course is a tertiary course for the purposes of paragraph 1061PC of the Social Security Act 1991.
(3) For paragraph 5D (1) (b) of the Act, a unit of a course mentioned in subsection (1) or (2) is part of a tertiary course.
Under the Minister's Determination, undergraduate or postgraduate accredited higher education course which is at the level of a diploma conducted by the RTO is a tertiary course.
Based on the information provided, you are a RTO. The Diploma course is an accredited higher education course, and is within the scope of your registration as a RTO. Therefore the Diploma course satisfies definition of tertiary course and is GST-free as an education course under section 38-85 of the GST ACT. Any fees that are charged for tuition, facilities and other curriculum related activities associated with this course are not subject to GST.
Issue 2
Goods and Services Tax Ruling GSTR 2001/1 deals with supplies of tertiary education courses that are GST-free under section 38-85 of the GST Act.
Paragraph 23 of GSTR 2001/1 states a tertiary course generally consists of component parts that are commonly referred to as subject, course, module, unit or program.
Where you supply one unit of a tertiary course that is covered by the Minister's determination and the recipient is enrolled in that unit, the supply of that unit is GST-free.
As stated in the reasons for decision for issue 1, the supply of the Diploma course by you is GST-free supply of a tertiary course. Therefore, the single unit of the taken of the Diploma course is a GST-free as a tertiary course as the unit is part of a tertiary course covered by the Minister's Determination.
Issue 3
As discussed in the reasons for decision for issue 1, GST is payable on a taxable supply under section 9-5 of the GST Act.
From the facts given, you satisfy the requirements of a taxable supply under paragraphs 9-5(a) to 9-5(d) of the GST Act as you make the supply of the unaccredited short course for consideration; the supply is made in the course or furtherance of its enterprise; the supply is connected with Australia and you are registered for GST.
There are no provisions under the GST legislation in which the supply of the unaccredited short course by you to individuals in Australia could have been input taxed. What remains to be determined is whether the supply is GST-free.
A supply of an education course will be GST-free under section 38-85 of the GST Act if it satisfies definition of the 'education course' under section 195-1 of the GST Act.
Based on the information provided, the unaccredited short course does not satisfy the definition of an education course under section 195-1 of the GST Act. Therefore, your supply of this course is not GST-free under section 38-85 of the GST Act.
The supply of the unaccredited short course by you to individuals in Australia does not satisfy any other GST-free provisions.
Therefore, the supply of the unaccredited short course by you to individuals in Australia is a taxable supply under section 9-5 of the GST Act and you will be liable for GST on the supply of this course.