Edited version of your written advice

Authorisation Number: 1051277364861

Date of advice: 1 September 2017

Ruling

Subject: GST and a supply of various language courses

Question

Is the supply of various language courses by an Australian entity (you) to secondary school students in Australia subject to GST?

Answer

Where you are registered or required to be registered for GST, your supply of the language courses will not be subject to GST. Your supply of language courses to secondary school students will be GST-free under section 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Where you are not required to be registered for GST, your supply of language courses to secondary school students in Australia will be outside the scope of GST. Therefore you will not liable to pay GST for the supply of these courses.

Relevant facts and circumstances

You are a body corporate that operates as a not-for-profit education enterprise with a focus on provision of senior secondary programs in languages.

You provide senior secondary courses in various languages to secondary school students in Australia. Your principal aim is teaching the languages other than English.

You do not receive any funding from the Education Directorate Department of Education and Training.

Board of Senior Secondary Studies (BSSS) has approved your registration as a Specialist Education Provider until XX XXXXXXXX 20XX.

You are currently providing some courses to secondary school students in Australia. These courses are accredited senior secondary courses which contribute towards the student’s credits for university entry and towards Senior Secondary Certificate.

The processing of grades and scores is managed by the BSSS.

You are planning to provide additional language courses to secondary school students in Australia in 20XX which are also senior secondary courses:

You are also intended for delivery of a beginning course in indigenous languages in 20XX.

After completing the course in which the students are enrolled with you, along with other requirements for senior secondary graduation (including courses undertaken in other subjects such as English or Mathematics undertaken with the school or college through which they do the rest of their Year 11-12 program), students receive the Relevant Senior Secondary Certificate.

If eligible, the students also receive a Tertiary Entrance Statement with an Australian Tertiary Admission Rank (ATAR) from the BSSS.

You are not registered for GST.

Your current and projected annual GST turnover is less than $XXX,XXX.

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

Taxable supply

GST is payable on a taxable supply. Section 9-5 of the 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 language courses in Australia will be taxable if all the requirements in section 9-5 of the GST Act are satisfied.

From the facts given, your supply of various language courses to secondary school students in Australia, satisfy paragraphs 9-5(a) to 9-5(c) of the GST Act, as follows: 

(a) you make the supply of various language in return for consideration by way of payments;

(b) the supply is made in the course of your business; and

(c) the 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).

Therefore, we need to consider whether you are required to be registered for GST (paragraph 9-5(d) of the GST Act).

Paragraph 9-5(d): Are you required to be registered for GST?

As you are not registered for GST, it needs to be established whether or not you are required to be registered for GST.

Under section 23-5 of the GST Act, a supplier is required to be registered for GST if:

a) the supplier carries on an enterprise; and

b) the supplier’s GST turnover (current and/or projected) meets the GST registration turnover threshold (currently $A75,000 and $A150,000 for non-profit organisation).

Section 188-10 of the GST Act provides that your GST turnover meets the registration turnover threshold if:

● your current GST turnover is at or above the turnover threshold and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold; or

● your projected GST turnover is at or above the turnover threshold.

The supplier can choose to register for GST if its GST turnover is less than the turnover threshold.

Goods and Services Tax Ruling GSTR 2001/7 (available at www.ato.gov.au) provides guidance on the meaning of GST turnover.

The current annual turnover is the sum of the values of all supplies made in a particular month plus the previous 11 months. The projected annual turnover is the sum of the value of all supplies made in a particular month plus the anticipated value of supplies to be made in the next 11 months.

Supplies that are connected with Australia are included when calculating the GST turnover even if these connected supplies are determined to be GST-free.

Accordingly when you calculate your GST turnover you will include all supplies that are connected with Australia (including GST-free supplies). Where your GST annual turnover as a non-profit organisation is $A150, 000 or more, you will be required to be registered for GST. You can call us on 13 28 66 to register for GST or register through your tax agent or online.

Where your GST annual turnover is less than $A150, 000, you are not required to be registered for GST but you can choose to register for GST.

However, if you register for GST your supply will be a taxable supply to the extent that it is not GST-free or input taxed.

Your supply of services is not an input taxed supply under the GST Act. We need to consider GST-free provisions.

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 pre-school course

● a primary course

● a secondary course

● a tertiary course

● a special education course. 

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

To be an education course and thus, GST-free, the language courses which you provide, must satisfy one of the ‘education course’ definitions in section 195-1 of the GST Act.

Most relevant to your situation is the secondary course from the definition in section 195-1 of the GST Act.

Secondary course

Goods and Services Tax Ruling GSTR 2000/30 sets out the Australian Taxation Office (ATO) view on the supplies that are GST-free for pre-school, primary and secondary education courses

Goods and Services Tax Ruling GSTR 2000/30 provides guidance on the supplies that are GST-free for pre-school, primary and secondary education courses

Paragraphs 23 to 28 of GSTR 2000/30 provide guidance on secondary courses.

A secondary course means:

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

● any other course of study or instruction that the Education Minister has determined is a secondary course for the purposes of this Act.

The Education Minister has made a determination under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act, being the Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (Determination 2009/2).

The Student Assistance Act 1973 states:

education institution means:

(a) a higher education institution; or

(b) a technical and further education institution; or

(c) a secondary school; or

(d) any other institution (including an educational institution), authority or body, that is in Australia and that, in accordance with a determination by the Minister, is to be regarded as an education institution for the purposes of this Act.

secondary school means an educational institution in Australia that, in accordance with a determination by the Minister, is to be regarded as a secondary school for the purposes of this Act.

The Commonwealth Education Minister has made a determination under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act, being the Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (Determination 2009).

Determination 2009, states the following in relation to secondary courses:

Secondary courses

For paragraph 5D(1) (a) of the Act, a secondary course is a course:

(a) specified in Column 1 of the table in Schedule 1 to this instrument that is provided by an education institution specified for that course in Column 2 of that table; or

(b) provided by a secondary school, a registered training organisation or a higher education institution that leads to an accredited secondary course qualification involving:

(i) accredited secondary course subjects; or

(ii) a VET course

Under Determination 2009/2, a secondary course must be delivered by a recognised secondary school, a RTO, a higher education institution or a special school.

Paragraph 45 of GSTR 2000/30 states:

45. However, if the provider is approved by the relevant state or territory body to conduct a pre-school, primary or secondary course, the supply made to students is the supply of an education course in its own right and is GST-free.

A secondary school is either an institution located in Australia that is a government secondary school or is recognised as a secondary school under the law of the State or Territory in which the institution is located.

Based on the information provided, you are not a secondary school, a RTO, a higher education institution or a special school. However, you are approved by the BSSS to conduct senior secondary courses until XX XXXXXXXX 20XX. Therefore the supply of the above courses will be GST-free while ever you maintain that registration.