Edited version of your written advice

Authorisation Number: 1051409536842

Date of advice: 7 August 2018

Ruling

Subject: GST-free supplies of Adult and Community Education Courses

Question

Are your courses GST-free supplies for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Your courses will qualify as GST-free supplies provided you:

● have not been refused recognition, or

● disqualified, by a State or Territory authority as a provider of courses of the kind described in subsection 5(2) of Determination 2016 on the basis of failing to meet or maintain the standards required by that authority.

Relevant facts and circumstances

You are registered for GST.

In relation to each of the identified courses (both e-learning and instructor) the courses:

● are not courses mentioned, in paragraph (a), (b), (c), (d), (f), (h), (i), (j) or (k) of the definition of education course in section 195-1 of the GST Act; and

● are available to adults in the general community; and

● not courses provided by, or at the request of an employer to the employees of that employer; and

● not courses provided by, or at the request of an organisation to the members of that organisation; and

● are not courses that are provided by way of private tuition to an individual.

You are not a registered training organisation (RTO) and your courses are not vocational

education and training (VET) courses.

You are not recognised or funded by a State or Territory authority as a provider of adult or community education courses.

You are a not-for-profit company.

Your courses are opened to the general public on a first come first served basis.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 sections 38-85 & 195-1

Reasons for decision

Adult and community education (ACE) course

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, amongst other things, an ACE course.

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 courses 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.

The Education Minister has determined courses of study or instruction that are ACE courses in the A New System (Goods and Services Tax) (Adult and Community Education courses) Determination 2016 (ACE Determination).

Goods and Services Tax Ruling (GSTR 2000/27) applies to adult and community education courses.

Paragraphs 11-13 of GSTR 2000/27 state:

Definition of an adult and community education course

11. For a course to be a GST-free adult and community course under paragraph (a), the following three requirements must be satisfied:

(i) The course must be a course of study or instruction that is likely to add to the employment related skills of people undertaking the course; and

(ii) The course must be of a kind determined by the Education Minister to be an adult and community education course; and

(iii) The course must be provided by a body that is either a higher education institution or by a body that is recognised or funded by a State or Territory authority to conduct adult and community education courses as described in the Education Minister's determination

12. It is important to note that the Education Minister is not responsible for determining whether an adult and community education course is likely to add to the employment related skills of people undertaking the course. This criterion is separate from the Minister's Determination, and will depend on the facts of each case.

Requirements specified in paragraph (b) of the definition

13. Paragraph (b) of the definition of adult and community education course allows the Education Minister to determine, independently of the requirements set out in paragraph (a) that a course is an adult and community education course as defined in section 195-1. In these circumstances, for such a course to be GST free, it must:

(i) be determined by the Education Minister to be an adult and community education course; and

(ii) be likely to add to the employment related skills of people undertaking the course.

Paragraph (a) of the ACE definition in section 195-1 of the GST Act adds

The course must be of a kind determined by the Education Minister to be an adult and community education course

At subsection 5(2) of the ACE Determination, the Education Minister states that an ACE course must:

(a) not be any other education course defined in section 195-1 of the GST Act; and

(b) be available to adults in the general community; and

(c) not be provided by or at the request of an employer to employees of that employer; and

(d) 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

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

The 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 courses are not one of the following 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

● a first aid or lifesaving course

● a tertiary residential college course

You informed us that all the courses are available to the general public. The courses are marketed on your website as well as by other entities who are concerned with health. You also informed that your courses are widely advertised on the internet and opened to the general public on a first come first served basis. Therefore, the courses are available to adults in the general community.

We have been informed that one of the courses you deliver is available to one section of the community (including individuals who receive endorsements from such members of that community).

ATO ID 2003/1013 states the following:

The entity supplies the course to its members only and any woman who wishes to take the course is required to join the association. Membership is open to any woman of 18 years or over. As concluded above, the entire membership of a particular gender constitutes a sufficiently large segment of the population to be considered adults in the general community. As such, the course is a course provided by an organisation for which membership is open to adults in the general community.

We consider that the entire membership of a particular group including individuals who receive endorsements from such members of the community constitutes a sufficiently large segment of the population to be considered 'adults in the general community'.

In addition, the courses are not:

● provided by or for an employer to their employees

● provided by or for an organisation to their members, except for general community organisations with few restrictions on membership

● private or individual tuition

Hence the courses are of the kind described in subsection 5(2) of the ACE determination.

However, the Note section provides that the course also has likely to add to the employment related skills of the participants, and be provided by, or on behalf of, a higher education institution or a body that is recognised or funded by a State or Territory authority to conduct adult and community education courses

likely to add to employment related skills

Goods and Services Tax Ruling GSTR 2000/27 discusses the meaning of 'likely to add to employment related skills'. Paragraph 15 of GSTR 2000/27 states:

15. The test as to whether an adult and community education course is likely to add to the employment related skills of people undertaking the course is an objective test and not dependent on the subjective intention of the providers of the course or the recipients. However we consider a course satisfies the test if the course meets the following requirements:

(a) It is directed at people who want to add to their employment related skills; and

(i) The objectives of the course specify the employment related skills that participants will acquire in undertaking the course; and

(ii) The means of imparting the skills to the participants are clearly identified prior to the commencement of the course; and

(iii) There is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours.

You informed us that the intended outcome of your courses is to allow participants to learn how to assist others who are developing a health problem or who are experiencing a health crisis within the relevant environment and that your courses will add to the employment related skills of the participants.

You further advised us that work places are increasingly focused on employees and other stakeholders’ mental health, are seeking people with greater skills in this area and sending employees to the identified courses.

We accept that the courses are aimed at adding to the employment related skills of the participants within the relevant environment, hence they satisfy this requirement.

However, as you are not a higher education institution or a body that is recognised or funded by a State or Territory authority to conduct adult and community education courses as described in the ACE determination, the course is therefore not an adult and community education course for the purposes of paragraph (a) of the ACE definition in section 195-1 of the GST Act.

Paragraph (b) of the ACE definition in section 195-1 of the GST Act:

determined by the Education Minister to be an adult and community education course

Subsection 6(1) of the ACE Determination refers to subsection 6(2), which provides that if the course is of the kind described in subsection 5(2) of the ACE determination, the course only has to satisfy the requirement for the provider, for it to qualify as an adult and community education course.

The ACE Determination provides at subparagraph 6(2)(b)(i), that the course must be provided by a body corporate that operates on a not-for-profit basis and has not been refused recognition, or disqualified, by a State or Territory authority as a provider of courses of the kind described in subsection 5(2) of this determination on the basis of failing to meet or maintain the standards required by that authority.

The ATO on its website www.ato.gov.au (see QC 53972) provides that an entity is a recognised ACE course provider if it is:

● a higher education institution

● recognised or funded by a state or territory authority, as a provider of ACE courses; or

● a body corporate operating on a not-for-profit basis having always met and maintained the standards for ACE course providers required by relevant state or territory authorities.

You are a not-for-profit body and are a registered charity and deductible gift recipient. Therefore, if you have:

● not been refused recognition; or

● not been disqualified on the basis of failing to meet or maintain the standards required by a State or Territory authority as a provider of courses of the kind described in subsection 5(2) of the determination,

you will be considered as an ACE provider and your education courses will be GST-free.

Note:

Sales of ACE courses by recognised ACE course providers to students are GST-free.

A representative or agent of an ACE course who provides service of delivering an ACE course is not GST-free.

An independent third party who purchases the right to sell an ACE course to students, sales of the course to students are not GST-free. The ACE course provider must also pay GST on their sale of the course to the entity.