Edited version of private advice

Authorisation Number: 1051636362718

Date of advice: 16 April 2020

Ruling

Subject: GST and education courses

Question

Are the education/training courses provided by you GST-free supplies of adult and community education (ACE) courses under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, the education/training courses provided are GST-free supplies of adult and community education courses under section 38-85 of the GST Act.

This ruling applies:

On and from the date of issue.

Relevant facts and circumstances

You are registered for GST.

You are a registered training organisation (RTO) and are listed on the national VET register on training.gov.au as Education/training Business or Centre: Privately Operated.

There are two types of broad training courses in question for the purpose of this ruling. Applicants can choose to do any course:

Professional Development Training courses

The time taken to complete these topics ranges from 90 minutes to 10 days.

Microsoft Office Courses

The time taken to complete these topics ranges from 90 minutes to 2 days.

The courses are marketed with the view they will add to the employment related skills of the participants.

On completion of the course, participants will receive non-accredited certificates of completion.

The courses are not presented by or on behalf of employers to their employees, nor by an organisation only to its members. While many students are selected by their employers to attend courses, the courses are not provided on behalf of employers. That is, students not employed by specific employer are able to attend courses you supply.

The courses are delivered by way of tutorial-like sessions and practical exercises, and not by way of private tuition. That is, any student can enrol in the above courses.

The courses are marketed with the view they will add to the employment related skills of the participants. You advised the courses are also advertised online, for example on the business and employment-oriented service websites.

The courses do not have any requirements for enrolment and the general public can enrol online via your website.

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

The supply of an 'education course' is GST-free under section 38-85 of the 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 provides that an ACE course means 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 *Student Assistance 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 of a kind described in the determination; or

(b) is determined by the Student Assistance Minister to be an adult and community education course.

Asterisked terms are defined in section 195-1 of the GST Act.

First requirement is that the course is likely to add to the employment related skills of people undertaking the course.GST Ruling 2000/27 (GSTR 2000/27) discusses the meaning of likelyto add to employment related skills. Paragraph 15 states:

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.

Additionally, example 31 from this ruling is relevant:

Example - Computer Course

31. The Tahmero University offers a course titled "Excel 2000 - Advanced". The course outline states that the applicants must have completed Excel - Intermediate or equivalent. The course is designed to teach the more advanced features of Excel 2000. An intermediate knowledge of Excel is a stated pre-requisite. The course objectives demonstrate that it is a course designed to add to the employment related skills of people undertaking the course and it is GST-free.

In your case, applying the principles from GSTR 2000/27:

(a) Your website allows interested participants to pick which course they want to train in so they can develop their skills based on their needs. Thus, the courses are directed to people who want to add employment related skills.

(i) Your courses all specify what skills the participant will obtain upon successful completion.

(ii) The details of each course, topics that will be covered and how they will be achieved are outlined on your website.

(iii) The content of the courses offered by you is directed to allow participants to improve several soft skills ranging from leadership skills, social skills, communication skills, time management skills and also focuses on technical computer skills. The combination of these skills are extensively required in most if not all office jobs and so there is a clear expectation the skills developed will be used in the course of being an employee rather than for recreational endeavours.

Therefore, you satisfy the first requirement in section 195-1 of the GST Act.

Second requirement is that the course is of a kind determined by the Student Assistance Minister.

To be a kind determined by the Student Assistance Minister to be an ACE course, the course must also meet the requirements of the Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2016. Atsubsection 5(2) of this Determination, the Minister states that an ACE course must:

(a) not be any other education course defined in section 195-1 of the 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 (or which membership 's open to adults in the general community;

and

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

You satisfy the requirements as follows:

(a) The course is not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act.

(b) The courses do not have any requirements for enrolment and can be enrolled online by the general public on your website. ATO Interpretive Decision (ATO ID) 2004/2 states that "the lack of any entry criteria coupled with the wide scale promotion and advertising of the course, and it's availability on a 'first come - first served basis means that the course is available to adults in the general community". Therefore, the courses are available to adults in the general community.

In satisfying the Education Minister's remaining requirements, the courses are not:

(c) provided by or for an employer to their employees;

(d) provided by or for an organisation to their members; nor

(e) provided by way of private or individual tuition.

As such, the courses satisfy the criteria of the Minister's Determination and the second requirement of section 195-1 of the GST Act and definition of an ACE course is satisfied.

Third requirement is that the course is provided by a body of a kind determined by the Education Minister.

As stated earlier, a requirement for an ACE course is that the course is:

(a) 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;

As outlined in the reasoning above, the course if of a kind determined by the Education Minister to be an adult and community education course and all of the requirements will be satisfied if it can be established that you are a body 'that is recognised, by a State or Territory authority as a provider of the courses of a kind described in the determination'. The relevant courses under the determination are the ACE courses.

You are a registered training organisation (RTO). The Student Assistance (Education Institutions and Courses) Determination 2019 defines an RTO as a training organisation that is registered on the National Register as a registered training organisation.

National Register (training.gov.au) lists you as:

Education/training Business Or Centre: Privately Operated.

Under the RTO registration, you are a body that is recognised by a State or Territory authority as a provider of courses across States and Territories. The courses under the RTO scope are not necessarily all of the courses that you provide and they do not include the non-accredited courses subject to this private ruling. However, we consider that as an RTO who has been recognised by a State or Territory authority as a provider of various accredited courses you meet the requirement above by being a body recognised by a State or Territory authority as a provider of courses of a kind described in the determination'.

The courses of a kind to be determined are those listed under paragraph 5 of the Determination. The type of course that is relevant are those that fall within paragraph 5(2)(b), that is a course that is available to adults in the general community. Given that the courses that you offer are available to the general public, it is considered that they satisfy this paragraph. This paragraph does not require the courses to be those that are accredited within the scope of the RTO's registration. The only requirement is that 'it is a recognised body who is the provider of a course of a kind...'.

As a result, the provision of education/training courses listed in the facts will be GST-free supplies of ACE courses as all of the requirements under section 38-85 of the GST Act are met.