Edited version of private advice

Authorisation Number: 1051646046207

Date of advice: 20 April 2020

Ruling

Subject: Supplies of non-accredited education courses

Question

Are the supplies of your non-accredited training courses GST-free supplies of education courses under Division 38 of the A New Tax System Goods and Services Tax Act 1999 (GST Act)?

Answer

No. The supplies of non-accredited training are not education courses as defined in Division 38 of the GST Act as they do not meet any of the relevant limbs of the definition. However to the extent that the courses are offered to, and tailored to individuals, the course will be GST-free supplies of Adult and Community Education.

This ruling applies for the following periods:

From the period 1 July 2019 onwards.

Relevant facts and circumstances

·  You are a Registered Training Organisation (RTO) with the Australian Skills Quality Authority (AQSA).

·  You provide training services, both accredited and non-accredited, to various businesses. All training services provided by you are not completely exclusive to business, focusing on compliance with State and Australian workplace laws. The courses are open to employers and individuals alike.

·  Courses you offer do not combine accredited and non-accredited units.

·  This ruling is confined to non-accredited courses you offer.

·  Currently you treat the non-accredited courses as taxable.

·  You advised 'non-accredited' means not accredited within the scope of your RTO registration with AQSA. Your accredited training with AQSA is listed on your RTO registration at training.gov.au.

·  Your non-accredited training falls into two broad categories:

-  Work Health and Safetyrelated and

-  General workplace training.

·  The first type of non-accredited training is prescribed by theWork Health and Safety legislation. Both of these courses do not have a course code. In addition you advised:

-  It is delivered under your State government licence.

-  Only an RTO can deliver the training even though it is not within the scope of their RTO registration with AQSA and is in no way connected with AQSA.

-  In this circumstance, the requirement to be an RTO is a State government requirement.

-  The training has to meet the requirements set by the health and safety regulator.

-  Course materials are provided by health and safety regulator and the course has to be delivered per the materials they provide.

·  You currently deliver the Health and Safety Representative course. In relation to this course you advised:

-  These are mostly conducted quarterly on-site. You generally do four courses per quarter.

-  It can be a five day course - this variant of the course is advertised to the public at large as well as company clients.

-  When the course is run for corporate clients, it's the same health and safety regulator course with scope to only change a couple of topics.

-  There is also a refresher course required every three years - it runs as a day course.

-  A health and safety representative (HSR) is elected in the workplace. Once elected to the position, representatives have three months to be trained per the regulator's requirements, so the employer sends the HSR for training.

·  The course materials state that:

This course is intended to provide Health and Safety Representatives (HSRs) with the knowledge and skills necessary to apply the principals of workplace consultation on work health and safety matters as required under the [legislation]

·  You will in future deliver another course called 'Health and Safety Officer Course'. You will not be delivering this for some years but you would like the ruling to cover this course. In relation to this course you provided relevant facts.

·  The WHSQ licence allows you to sit on the health and safety regulator panel of training providers but you are not paid by them and have no commercial agreement with them. You must find your own clients.

·  These courses are audited both at the company level and at the trainer level by the health and safety regulator.

·  In relation to the general workplace training you advised:

-  It can be any course you choose to create and deliver as you can train within any workplace capacity but there are currently these courses:

-   Manual handling

-   Office ergonomics

-   Due Diligence

-   Fire safety course. It includes

-   General evacuation,

-   First response and

-   Fire warden courses

·  You advised:

-  These are usually on-site courses.

-  They can be customised to the client's needs as they may review the procedures for the client and tailor the course accordingly.

-  It is always for work purposes.

·  There is no specific course code or name as these courses are created in-house.

·  It is all non-accredited and there is no formal assessment. Certificates are provided with your logo but are only certificates or statements of attendance. You do not word them with terms such as 'competency' as they're not AQSA accredited courses.

·  With the AQSA accredited training, assessments must be taken. For example, an accredited fire warden course has five competencies and is more in depth but for the non-accredited training, it can be reduced to a one hour fire warden training session. The latter may better suit the needs of a smaller business with few employees.

·  In relation to the terms of your engagement you advised (giving the fire safety course as an example) that:

-  Clients call and ask for a quote to deliver a course, for example fire safety training.

-  You then provide them with a written quote which will outline the cost depending on what they want.

·  You bear all commercial risk as you run all aspects of the course:

-  Marketing

-  Enrolment

-  Billing: you set the fees; issue invoices in the name of the company or member of the public's name

-  Issue the certificate of attendance in the name of your company.

-  General administration

·  You provided sample material from the five day Health and Safety Representative Course. It indicates that:

The objective is to provide Health and Safety Representatives with the knowledge and skills necessary to apply the principles of workplace consultation on work health and safety matters as required under the legislation.

·  You also provided a copy of tailored training you prepared for a specific client which was Health and Safety Representative Training. It stated that your company services businesses and individuals across varied industry types.

·  Section xx of that document sets out your courses. Amongst these are accredited courses

·  The cost for the five day Work Health and Safety Representative course is $xx plus GST per participant.

·  The additional one day refresher every three years is $xx plus GST per participant.

·  The material also indicates that you provide non-accredited Warden Training tailored to the site emergency response plan for $xx plus GST.

·  You provided a copy of a booklet issued by the State Government.

·  The booklet set out the requirements as to who can apply.

·  The booklet also outlines the process of applying for approval to conduct HSR training, the minimum training qualifications a trainer must have amongst other things.

·  You also provided a second booklet that sets out the terms and conditions under which you are given authority to train.

·  You provided a sample certificate for the WHS course. It sets out the dates of training over the five days, the managing director's signature, the document reference, the student ID, the issue date and the expiry date.

·  You provided a sample invoice for that course. It indicates the course value and the additional GST payable. It is addressed to a company.

·  You also provided a copy of course slides.

·  In relation to the general workplace courses (other than WHS related courses) you provided:

-  A course proposal to a client for Fire Warden Training.

-  A course outline for Hazardous Manual Tasks.

-  An Evacuation and First Response course outline.

-  A sample 'confirmation of attendance' document for the Fire Warden course.

·  All of the non-accredited courses you provide are advertised on your website and in the yellow pages, and other sites on the internet including your own.

Relevant legislative provisions

A New Tax System Goods and Services Tax Act 1999, section 9-5, section 38-85, section 195-1

Reasons for decision

The facts set out that the ruling is to apply to the non-accredited courses that you run.

The WHS training courses

The Health and Safety courses collectively will be referred to as the 'WHS training courses' throughout this ruling in so far as they can be dealt with together by their nature as health and safety courses.

GST is payable on a taxable supply. Under section 9-5 of the GST Act, an entity makes a taxable supply if:

(a)  the supply is made for consideration; and

(b)  the supply is made in the course or furtherance of an enterprise that the entity carries on; and

(c)  the supply is connected with the indirect tax zone (Australia); and

(d)  the entity is registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Your supply of the WHS training courses satisfies paragraphs 9-5(a) to 9-5(d) of the GST Act as:

(a)  you make the supply for consideration; and

(b)  the supply is made in the course of an enterprise that you carry on in Australia; and

(c)  your supply is connected with Australia as the courses are done through an enterprise that you carry on in Australia; and

(d)  you are registered for GST.

However, your supply of the WHS training courses is not a taxable supply to the extent that it is GST-free or input taxed.

There is no provision under the GST Act that makes your supply of the WHS training courses input taxed.

GST-free supply

Relevant to your supply of WHS training courses is paragraph 38-85(a) of the GST Act. Under paragraph 38-85(a) of the GST Act a supply of an education course is GST-free.

'Education course' is defined in section 195-1 of the GST Act to include, amongst other things:

·   a tertiary course

·   an adult and community education course, or

·   a professional or trade course.

Tertiary course

Under section 195-1 of the GST Act, a 'tertiary course' means:

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

(aa) a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-government higher education institution; or

(b) any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act

Goods and Services Tax Ruling GSTR 2001/1 Goods and services tax: supplies that are GST-free as professional or trade courses provides guidance in determining when a course is a tertiary course for GST purposes.

To be GST-free as a tertiary course, a course must satisfy the Education Minister's Determination of Education Institutions and Courses under Subsections 3(1) and 5D(1) of the Student Assistance Act 1973 (Education Minister's Determination No 2007/1).

The Education Minister's Determination No 2007/1 provides thatan accredited vocational education and training program delivered by a RTO, is a tertiary course.

The WHS training courses that you are conducting are not currently listed in your scope of RTO registration. Therefore, the two HSR training courses are not a course as specified in the Education Minister's Determination No. 2007/1.

Accordingly, WHS training courses are not a 'tertiary course' as defined in section 195-1 of the GST Act and therefore are not GST-free education course under paragraph 38-85(a) of the GST Act.

Adult and community education (ACE) course

Under section 195-1 of the GST Act, 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 a course 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.

Goods and Services Tax Ruling GSTR 2000/27 Goods and services tax: adult and community education courses; meaning of 'likely to add to employment related skills' provides guidance in determining which supplies of ACE courses are GST-free under paragraph 38-85(a) of the GST Act.

To be a GST-free ACE course, a course must:

·   be likely to add to the employment related skills of people undertaking the course; and

·   be of a kind determined by the Education Minister to be an ACE course, and

·   be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis that has not been refused recognition or disqualified by a state or territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

Based on the information you have provided, the courses will add to the work related skills of people undertaking the course.

To satisfy the definition of an ACE course the WHS training courses must meet the requirements of the Education Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2016 (ACE Determination). At paragraph 5(2) of the ACE Determination, the Education Minister states that an ACE course must:

·   not be any other education course defined in section 195-1 of the GST Act;

·   be available to adults in the general community;

·   not be provided by or at the request of an employer to employees of that employer;

·   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

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

You are also not on a not for profit basis.

Further, it is not accepted that the WHS training courses satisfy the criteria outlined above because:

·   to be available to adults in the general community the courses must be genuinely available to most adults in the general community. One way of determining this is to look at how the courses are advertised. Whilst your WHS courses are advertised principally on the internet, the courses are principally aimed at people who are already in employment. You did say that some people may get benefit from them for future employment such as something to put on their resume particularly in relation to the Health and Safety Officer course which you may run in the future. However, the quotes and material provided show the predominant aim has been and currently is employers.

·   similarly to the point above, the courses are predominantly provided at the request of an employer to employees of that employer and at the request of an organisation to members of that organisation.

Your WHS training courses therefore do not satisfy the definition of 'ACE course' as defined in section 195-1 of the GST Act and therefore, are not GST-free education courses under paragraph 38-85(a) of the GST Act. However, to the extent that they are available to individuals and the course is tailored to them the courses will be GST-free.

Professional or trade courses

'Professional or trade courses' are defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:

a)    for entry to a particular profession or trade in Australia; or

b)    to commence the practice of (but not to maintain the practice of) a 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 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 Goods and services tax: supplies that are GST-free as professional or trade courses provides guidance on when a course meets the requirements of GST-free professional or trade courses as defined in section 195-1 of the GST Act.

According to paragraph 96 in GSTR 2003/1, there are numerous industrial instruments that require a person to obtain approval or certification before a particular tasks or duty in an occupation can be undertaken. The fact that there is such a requirement does not necessarily mean that the particular task or duty is a separate profession or trade. If the qualification merely relates to the undertaking of a duty or task in a profession or trade, a course leading to that qualification is not a professional or trade course. The qualification is not an essential prerequisite.

Paragraph 97 in GSTR 2003/1 provides an example, which is similar to your situation:

Example 10 - a course that fulfils a legal requirement in relation to a task

97. The Workplace Safety Act of a State requires that a person be appointed as a health and safety officer in a workplace of more than thirty people. Any person, including the employer, may perform this role if he or she is approved to do so. The individual performs their normal duties in the workplace and the role as a safety officer is merely an additional task. The legislation places the obligation on the employer to satisfy this requirement. The legal constraint does not relate to a person entering a profession or trade. A course you run to train a person to perform such a role is not a professional or trade course.

Referring to example 10, the WHS training courses that you provide are not considered to be a 'Professional or Trade courses' as the qualification is not an essential requisite for any profession or trade. The outcome is that a workplace health and safety representative is certified to undertake that role in addition to their normal duties and confirms that the employer has satisfied the legislative requirement under the WHS Act.

Accordingly, your WHS training courses are not a 'professional or trade courses' as defined in section 195-1 of the GST Act and therefore are not GST-free education courses under paragraph 38-85(a) of the GST Act.

Summary

There are no other provisions under the GST Act that make your supply of the WHS training courses GST-free.

Your supplies of the WHS training courses are a taxable supply under section 9-5 of the GST and therefore subject to GST.

General Workplace training

The second category of non-accredited training you provide is described as general workplace training. These courses are as they are described, that is, non-accredited training courses based on some of the training courses that are provided as an RTO. The titles ascribed to these courses were titled by you as:

·   Fire Courses

·   General Evacuation Course

·   First Response and

·   Fire Warden

Again the issue is whether these non-accredited courses as supplied are taxable supplies under section 9-5 or are they GST-free under Subdivision 38-C of the GST Act?

The application of Subdivision 38-C of the GST Act will be determined by whether any of these courses meet the definition of an education course. As above, there are only three potential course types that these courses could fall under:

·   a tertiary course

·   an adult and community education course, or

·   a professional or trade course.

Tertiary Course:

The courses are not at masters or doctorate level. Nor are they determined by the education minister as a tertiary course in the Education Minister's Determination No 2007/1.

The Education Minister's Determination No 2007/1 provides thatan accredited vocational education and training program delivered by a RTO, is a tertiary course. None of the general workplace courses are delivered within the scope of the RTO registration as they are not accredited.

Accordingly the general workplace courses are not 'tertiary courses' as defined in the GST Act.

Adult and Community Education Course

Under section 195-1 of the GST Act, 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 course 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.

As above, GSTR 2000/27 provides guidance in determining which supplies of ACE courses are GST-free under paragraph 38-85(a) of the GST Act.

To be a GST-free ACE course, a course must:

·   be likely to add to the employment related skills of people undertaking the course; and

·   be of a kind determined by the Education Minister to be an ACE course, and

·   be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis that has not been refused recognition or disqualified by a state or territory authority as a provider of ACE courses for failing to meet or maintain the standards required by that authority.

The courses clearly add to the employment related skills of the entrants into the course. It also does not matter that they are outside the scope of your RTO registration.

To satisfy the definition of an ACE course the general workplace training courses must meet the requirements of the ACE Determination. At paragraph 5(2) of the ACE Determination, the Education Minister states that an ACE course must:

·   not be any other education course defined in section 195-1 of the GST Act;

·   be available to adults in the general community;

·   not be provided by or at the request of an employer to employees of that employer;

·   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

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

Based on the information you have provided it is not accepted that the general workplace training courses satisfy the criteria outlined above principally because they are not aimed at individuals but rather the employers that approach you to provide the training for their staff. The course materials and quotes also suggest this.

Your general workplace training courses therefore do not satisfy the definition of 'ACE course' as defined in section 195-1 of the GST Act and therefore, are not GST-free education courses under paragraph 38-85(a) of the GST Act. To the extent that the courses are advertised to individuals and tailored to them they will be GST-free.

Professional or Trade course

As stated above, 'Professional or trade courses' are defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:

a)    for entry to a particular profession or trade in Australia; or

b)    to commence the practice of (but not to maintain the practice of) a 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 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.

Per GSTR 2003/1, where the qualification merely relates to the undertaking of a duty or task in a profession or trade, a course leading to that qualification is not a professional or trade course. The qualification is not an essential prerequisite. Also, these courses are completed with a statement of attendance rather than certification.

Accordingly, your WHS training courses are not a 'professional or trade courses' as defined in section 195-1 of the GST Act and therefore are not GST-free education courses under paragraph 38-85(a) of the GST Act.

Summary

There are no other provisions under the GST Act that make your supply of the WHS training courses GST-free to the extent that it is not tailored to, and provided to, individuals.