Edited version of your written advice

Authorisation Number: 1013033195784

Date of advice: 22 June 2016

Ruling

Subject: GST and professional or trade courses

Question 1

Are the training services you supply GST-free professional or trade courses?

Answer

Yes, the training services you supply are GST-free professional or trade courses.

Question 2

Is the sale of your safety equipment GST-free?

Answer

No, the sale of your safety equipment is not GST-free.

Relevant facts and circumstances

You are registered for GST.

You provide training services.

You are registered with a registered training organisation (RTO).

As a training provider you assist people of the general public, government agencies and employers/employees to undertake and meet the requirements of various courses.

White card training is a legal requirement and workers must be accredited with white card to gain access to the site, under the industrial agreement. They cannot commence their trade/profession without this qualification. Similarly, it is illegal to operate a front end loader/forklift without the appropriate licence etc.

As a registered training provider you are authorised by the relevant authority in your state to deliver the relevant training and to issue licences.

All the courses offered are nationally accredited courses leading to qualifications that are essential prerequisites for entry to, or to commence the practice of a particular profession or trade in Australia.

Upon successful completion of the course students receive a qualification (licence) that is an essential prerequisite for working in the industry. The particular profession or trade cannot be practiced without the relevant certificate/licence.

There is a legal requirement applying to all the qualification you provide. Someone could not legally operate in such capacity without the relevant qualification acquired by doing the courses.

You are an independent contractor under a contractual agreement with the general public, government agencies and employers/employees (entities) to provide the services directly to the entities.

The entities are enrolled with the RTO. Students pay for the trade courses to you directly not the RTO.

You pay the RTO for the right to provide the courses to entities using the RTO's course material and the entities pay you in return for your services.

You purchase from the RTO nationally accredited courses that are supplies of GST-free courses by the RTO and then on sell those nationally accredited courses to the entities without modifying or customising those courses in anyway.

You currently are not charging GST to entities to receive the education course.

In association with the above courses you also sell safety equipment.

Question 1

Summary

The training services you supply are GST-free professional or trade courses

Detailed reasoning

Section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that the supply of an education course is GST-free. The definition of 'education course' in section 195-1 of the GST Act includes a professional or trade course.

'Professional or trade course' is defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:

• for entry to a particular profession or trade in Australia; or

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

Under the definition of 'essential prerequisite' in section 195-1 of the GST Act, a qualification is an essential prerequisite where there is a legal requirement for the qualification, for example, it is imposed by or under a law, regulation or industrial agreement; or there is a requirement imposed by a professional or trade association, either nationally or on a state basis.

In this case, the training courses you supply lead to the gaining of a qualification that is legally required, under the relevant laws, for entry to or commencement in that profession.

Goods and services tax (GSTR 2003/1) explains the meaning of 'professional or trade course' in section 195-1 of the GST Act.

Paragraph 2 of GSTR 2003/1 provides that when the term 'you' in this Ruling is used it means you as the supplier of a course.

In this case:

• you are a registered training provider and you are authorised by the relevant authority in your state to deliver the relevant training and to issue licences.

• you are an independent contractor under a contractual agreement with the general public, government agencies and employers/employees (entities) to provide the services directly to the entities;

• you purchase from an RTO nationally accredited courses that are supplies of GST-free courses by the RTO and then on sell those nationally accredited courses to the entities without modifying or customising those courses in anyway.

• you pay the RTO for the right to provide the courses to the entities using the RTO's course material and the entities pay you in return for your services.

• the Students pay for the trade courses to you directly not the RTO;

Therefore, according to the facts provided we consider that you are the entity supplying the course to the relevant entities.

As you are supplying courses that meet the requirements of professional or trade courses, as defined in section 195-1 of the GST Act, your supplies of the relevant courses are GST-free under section 38-85 of the GST Act.

Question 2

Summary

The sale of your safety equipment is not GST-free

Detailed reasoning

Section 9-5 of the GST Act provides that you make a taxable supply if you make the supply for consideration,  in the course or furtherance of an enterprise that you carry on, the supply is connected with the indirect tax zone and 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.

Unlike the supply of a professional or trade course a supply of safety equipment is not GST-free.

A supply of safety equipment is neither GST-free not input taxed. This means that you will need to remit the GST on your taxable supplies of safety equipment.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 sections 9-5 & 38-85.