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Edited version of your written advice
Authorisation Number: 1013055327653
Date of advice: 28 July 2016
Ruling
Subject: Adult and Community Education
Question 1
Are the courses we provide a GST-free supply of an education course under s38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
The courses you provide will be GST-free where they are likely to add to the employment related skills of people undertaking the course.
Relevant facts and circumstances
You are a registered training organisation (RTO) who provides both accredited and non-accredited training courses to the general public.
You currently provide the following courses:
Accredited
CHC22015 Certificate II in Community Services
The Certificate II in Community Services provides an introduction to work in the community services industry. This is qualification is for those who are considering work in the community services sector or who have recently obtained an entry level position in a community services organisation. Students must be at least 18 years of age and are required to undertake a pre-training review including a Language, Literacy, and Numeracy test prior to commencing the training, to ensure the correct supports are in place prior to training, if necessary.
CHC32015 Certificate III in Community Services
The Certificate III in Community Services, is a broad-based qualification with a focus on either community services work or community development work. There are no formal pre-requisites for this skill set, but our entry requirements are that students are currently working in a community services role.
CHCSS00077 Financial Literacy Education Skillset
The three (3) Financial Literacy units (FLE) are suited for workers who hold a Community Services qualification at Certificate III level or higher or have significant sector experience. This skill set is aimed at workers who are working with clients facing issues with their day to day finances and those who are at risk from increasing debt.
Non-accredited
New Leaders Course (non-accredited)
Money Management Workers Guide (non-accredited) introductory online course
Time Management workshop
Governance workshops
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 38-85.
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). 'Education course' is defined in section 195-1 of the GST Act to include, among other things, an adult and community education (ACE) course.
Section 195-1 of the GST Act and the Education Minister's Determination A New Tax System (Goods and Services Tax) (Courses) Determination 2000 (Education Minister's Determination) provide that an ACE course means a course of study or instruction that is:
(i) likely to add to the employment related skills of people undertaking the course,
(ii) of a kind determined by the Education Minister to be an ACE course, and
(iii) provided by, or on behalf of, a body that is:
• a higher education institution,
• recognised or funded by the relevant State or Territory authority 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.
Accredited Courses
The accredited courses provided by you are, based on the information supplied, likely to add to the employment related skills of the participants (see GSTR 2000/27 Goods and services tax: adult and community education courses; meaning of "likely to add to employment related skills" (GSTR 2000/27)) and you are a recognised training organisation (RTO) - a provider of adult and community education courses by a relevant State or Territory authority. Therefore, the first and third requirements of an ACE course are satisfied.
The second requirement for an ACE course is that it must be of a kind determined by the Education Minister to be an ACE course. At subsection 5(2) of the Education Minister's Determination, the Education Minister states that an ACE course must:
• be likely to add to the student's employment related skills
This includes gaining skills such as literacy and numeracy, building on existing skills, or developing skills in new areas. The course must also:
• specify the employment-related skills that participants will acquire in its course objectives
• before the course begins, set out clearly how the participants will learn the skills; and
• teach skills that are reasonably likely to be used at work, or in a business, occupation, profession, or trade, rather than for a hobby or recreation.
People have a broad range of education, skills and experience so an ACE course is a course that adds to a person's employment-related skills taking into account the person's background.
• be available to adults in the general community (including people over 15 who are not in tertiary education), and it is not restricted to particular groups, except very generally (such as women, or people with access to a computer)
• not be provided by or for an employer to their employees
• not be provided by or for an organisation to their members, except for general community organisations with few restrictions on membership; and
• not be private or individual tuition
• not be one of these courses (that are defined separately and may be GST-free in their own right):
• secondary, tertiary, or special education
• an English language course for overseas students
• a professional or trade course, or
• a first aid or lifesaving course.
The accredited courses are not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act.
The detailed content of the courses are clearly set out via the internet at training.gov.au. The courses are not restricted in any way. Therefore, the courses are available to adults in the general community.
The courses are not provided at the request of an employer to employees of that employer or by an organisation for its members and the courses are not provided by way of private tuition.
As such, the courses satisfy the criteria of the Education Minister's Determination and the second requirement of an ACE course is satisfied.
As you are an RTO and provide the accredited courses in circumstances that are in accordance with the Education Minister's Determination, you make a supply of an ACE course that is GST-free under section 38-85 of the GST Act.
Non-accredited Courses
As set out in the discussion of the accredited courses above, for determining whether the non-accredited courses are ACE courses, there are a number of key factors including whether they are likely to add to employment related skills of the participants. (See requirements as set out above)
There are some aspects within the descriptions of these courses that may be said to be likely to add to the employment-related skills of attendees. However, the objectives of each course do not specify the employment-related skills that will be acquired in undertaking the course.
Additionally, how the participants will learn the skills is not clearly explained prior to commencement of the courses.
When compared to the detail set out in the descriptions for the accredited courses, which specifies the required number of units, the number of core and elective subjects and assessment methods, the non-accredited courses would not meet the criterion of the Education Minister's Determination.
Finally, you have stated that the courses are mainly run for organisations and their volunteer board members or their staff. This does not satisfy subsection 5(2)(d) of the Education Minister's Determination:
…not be a course that is provided by, or at the request of an organisation to the members of that organisation, except and organisation for which membership is open to adults in the general community.
Where the non-accredited courses are provided under these circumstances, they will not be a GST-free supply of an ACE course.
I have included a copy of GSTR 2000/27 which includes examples to assist you in making any future assessment of non-accredited courses.