Edited version of your written advice

Authorisation Number: 1051436305597

Date of advice: 4 October 2018

Ruling

Subject: GST and training services

Question 1

What education category does each course/unit of competency fall under?

Answer

See below

Question 2

Is your supply of the education courses to students GST-free?

Answer

See below

Relevant facts and circumstances

● You are registered for GST and you provide training courses,

● You are not a Registered Training Organisation (RTO),

● The RTO with the Australian Skills Quality Authority (ASQA) offering nationally recognised VET qualifications in accordance the VET Quality Framework (VQF),

● You have entered into aa Agreement with the RTO for the delivery of Registered Training Organisation services,

● RTO will supply all the learning resources to you,

● You will provide courses to students under the Agreement,

● Your policies and procedure handbook is based on the RTO policies and procedure handbook

● The RTO website lists the courses and directs prospective students to your website.

● According to The Agreement;

● You will only appoint persons that fulfil the Standards for Registered Training Organisation (RTOs) 2015 (SRTO 2015) requirements,

● The RTO will process student records, issue Statement of Attainments and provide training and assessment services,

● You will pay the agreed service fees as set out in the Agreement,

● You will deliver the training and provide the assessment services for the qualifications listed in the Agreement in accordance with SRTO 2015,

● You will provide evidence of the vocational competence of your trainers and permit RTO to verify the evidence as RTO deems necessary. And you acknowledge your obligation to fulfil this requirement when you engage new trainers,

● You will provide RTO evidence of learning resources that will be used for the delivery of the training and assessment services, this will be provided by photographic evidence of all students conducting assessment with the relevant equipment, to enable RTO to verify the resources comply with the National Training Package,

● You will permit and cooperate with RTO and AQSA to unlimited rights to monitor and review delivery of training and assessment,

● You will have a person to distribute, accuracy of completion, collection and delivery of all quality assurance documents and records relating to the training and assessment delivered under the banner of RTO,

● The RTO will process, record and archive your relevant student records,

● The RTO will process all relevant electronic student reporting systems that RTO’s are required to use by ASQA,

● The RTO will issue Statements of Attainment to you for the students and provide training and assessment services as agreed that are within the scope of RTO registration,

● The RTO will carry out activities in accordance with STRO 2015, RTO policy and procedures and comply with all legislative requirements and provide you with a copy of their policy and procedures,

● The RTO will provide you with your trainers the RTO staff and contractors induction program including policies and procedures,

● The RTO will ensure both parties logos are equally displayed on the statement of attainment as well as the SRTO 2015 and AQF required information.

● You have provided a list of the courses you deliver.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

Division 38 of A New Tax System (Goods and Services Tax) Act 1999

Division 195 of A New Tax System (Goods and Services Tax) Act 1999

Reasons For Decision

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which 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 indirect tax zone; 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 term defined in section 195-1 of the GST Act)

In your case, you satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply courses for consideration and you make these supplies in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with the indirect tax zone and you are registered for GST.

There are no provisions in the GST Act under which your supplies of the courses are input taxed.

Therefore, what remains to be determined is whether your courses are GST-free. In accordance with paragraph 38-85(a) of the GST Act a supply of an education course is a GST-free supply.

Education course is defined in section 195-1 of the GST Act. The definition lists various types of education courses, including professional or trade courses and adult and community education courses.

A course is a professional or trade course if it leads to, among other things

● a qualification and

● the qualification is an essential prerequisite to a profession or trade.

Goods and Services Tax Ruling 2003/1: supplies that are GST-free as professional or trade courses (GSTR 2003/1) provides guidance on trade courses.

It is considered that the courses provided by you meet the definition of an education course. It does not matter if you or another party supplies the qualification that is an ‘essential prerequisite’, just which the course leads to a qualification. (paragraph 40 GSTR 2003/1)

If the document/qualification would normally be accepted by a Commonwealth, State or Territory authority, a national trade association, or if neither of those a state or territory association, has suitable evidence that a person has successfully completed the relevant course then that document is a qualification (paragraph 43 of GSTR 2003/1).

Paragraph 45 of GSTR 2003/1 discusses, among other things, what documents are qualifications and includes a statement of satisfactory completion, certificate, licence or an accreditation.

The qualification has to be an essential prerequisite for entry to, or to commence a profession or trade.

An ‘essential prerequisite’ must be imposed by an industrial instrument or a national professional or trade association or if neither applies a state or Territory association.

An industrial instrument means an Australian law, award, order determination or industrial agreement under an Australian law.

A ‘trade’ for GST purposes can include an occupation if it involves skilled handicraft and includes the operation of particular pieces of equipment or machinery (paragraph 90 of GSTR 2003/1).

Therefore, the courses that lead to licences imposed under a State or Australian law satisfy the requirements of a professional or trade course.

Adult and Community education courses

As discussed earlier, an ‘education course’ is defined in section 195-1 of the GST Act and includes adult and community education courses.

Section 195-1 of the GST Act provides that an ACE course means a course of study or instruction that amongst other things is likely to add to the employment related skills of people undertaking the course and provided by or on behalf of, amongst other things, a RTO.

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

If a course is likely to add to the employment related skills of the participant and is provided by or on behalf of a RTO and the course is of a kind determined by the Education Minister to be an ACE course the supply will be GST free.

For a course to be of a kind determined by the Education Minister the ACE course must;

● not be any other education course under the GST Act and,

● be available to the general adult community and,

● not be provided by or at the request of an members organisation and

● not provided by private tuition.