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Edited version of private advice
Authorisation Number: 1051625813420
Date of advice: 10 January 2020
Ruling
Subject: GST and education courses
Question
Is the supply of your course a GST-free supply of an education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No.
This ruling applies for the following period
The scheme commences on:
January 2020
Relevant facts and circumstances
· You are registered for GST.
· You supply a professional course.
· You are not a higher education provider or delivering this course on behalf of such a provider. You are not a registered training organisation.
· You advise your course is an essential prerequisite for a specific role.
· Your course is not mandated by any industrial instrument or professional/trade association.
· You provide all course material. You don't provide any accommodation.
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
Reasons for decision
Taxable supply
GST is payable on any taxable supply that you make. Section 9-5 of the GST Act provides that you make a taxable supply if:
· you make the supply for consideration
· the supply is made in the course or furtherance of an enterprise that you carry on
· the supply is connected with the indirect tax zone (Australia) and
· you are registered or required to be registered for GST.
However, the supply is not a taxable supply to the extent it is GST-free or input taxed.
On the facts given, you are registered for GST and make a supply of a professional course for consideration in the course of an enterprise you carry on in Australia. The supply of the course does not satisfy the requirements for an input tax supply. The issue that arises under section 9-5 of the GST Act is whether the supply of you course is a GST-free supply of an education course.
Professional/Trade course
Section 38-85 of the 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, amongst other things, a 'professional or trade course'.
To be a 'professional or trade course' as defined in section 195-1 of the GST Act, the course that you supply must:
1. lead to a qualification; and
2. that qualification must be an 'essential prerequisite' for entry to, or to commence the practice of (but not to maintain the practice of) a particular profession or trade in Australia.
In relation to the entry to, or the commencement of the practice of a particular profession, section 195-1 of the GST Act provides that a qualification will be an 'essential prerequisite' where:
· the course is a legal requirement under an industrial instrument, for example a law, regulation or industrial agreement, or
· the course is a requirement imposed by a professional or trade association, either nationally or on a State basis.
Goods and Services Tax Ruling GSTR 2003/1 (available at ato.gov.au) explains the meaning of 'professional or trade course' in section 195-1 of the GST Act.
You advised your course is not a legal requirement under any industrial instrument nor is it mandated by any professional/trade association. Therefore, it is not an 'essential prerequisite' prior to entering a particular profession or trade and is therefore not considered to be a GST-free professional/trade education course. As such, you are making a taxable supply of the course under section 9-5 of the GST Act.