Edited version of private advice

Authorisation Number: 1051750470659

Date of advice: 7 September 2020

Ruling

Subject: GST and tutoring services

Question

Are the tutoring services provided by Entity A GST-free pursuant to section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999?

Answer

No.

Relevant facts and circumstances

Entity A (You) are registered for GST.

You operate a coaching centre providing tutoring to students from prep (the level before year one) to year 12.

You supply the following courses:

·         English

·         Mathematics

·         Science.

Your English, Mathematics and Science courses are designed / based on the English, Mathematics and Science curriculum on the Australian curriculum website www.australiancurriculum.edu.au.

Most lessons are provided at your premises (pre COVID-19) and online.

Lessons are provided to a small group with a maximum 6 students.

Tuition fees are charged per session (1 hour or 1.5 hours depending on year level and course) with a course duration of one school term (approximately 10 weeks).

You do not hold any accreditation.

You are not a Registered Training Organisation.

You do not have an agreement with any entities to provide your courses.

You do not supply accommodation, excursions or meals to students.

You supply students with worksheets.

Your GST turnover is over $XXX.

You do not operate on a not-for-profit basis.

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

In this reasoning, please note:

·         unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

·         all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act

·         all reference materials referred to are available on the Australian Taxation Office (ATO) website ato.gov.au

You must pay the GST payable on any taxable supply you make.

Section 9-5 of the GST Act provides that you make a taxable supply if:

(a) you make the supply for consideration

(b) the supply is made in the course or furtherance of an enterprise that you carry on

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

(d) you are registered, or required to be registered for GST.

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

Applying the above to your situation, you make supplies of tutoring services for consideration in the course of your tutoring enterprise in Australia and you are registered for GST. Further, there are no provisions whereby your supplies will be input taxed. Therefore, your supplies of tutoring services will be taxable unless they are GST-free.

Section 38-85 of the GST Act provides that the supply of an 'education course' is GST-free.

Section 195-1 of the GST Act defines 'education course' to mean:

...

(a) a *pre-school course; or

(b) a *primary course; or

(c) a *secondary course; or

(d) a *tertiary course; or

(e) ...;

(f) a *special education course; or

(g) an *adult and community education course; or

(h) an *English language course for overseas students; or

(i) a *first aid or life saving course; or

(j) a *professional or trade course; or

(k) a *tertiary residential college course.

Each of these education courses are further defined in the GST Act. For your supply to be GST-free, your courses must satisfy the definition of one of the above education courses.

You have advised that your tutoring courses are provided to students from prep to year 12. Of relevance is whether your courses fall within categories (a) to (c) above.

Goods and Services Tax Ruling GSTR 2000/30 Goods and services tax: supplies that are GST-free for pre-school, primary and secondary education courses provides guidance on which supplies of pre-school, primary and secondary education courses are GST-free

Pre-school course

Paragraph 15 of GSTR 2000/30 describes a pre-school course as follows:

15. A pre-school course means a course that is delivered:

(a) in accordance with a pre-school curriculum recognised by:

(i)  the education authority of the State or Territory in which the course is delivered; or

(ii) a State or Territory body that has the responsibility for recognising pre-school curricula for courses delivered in that State or Territory; and

(b) by a school that is recognised as a pre-school under the law of the State or Territory. ^...

As you are not a recognised pre-school under state law your course is not a pre-school course.

Primary course

Paragraph 19 of GSTR 2000/30 describes a primary course as follows:

19. A primary course means:

(a) a course of study or instruction that is delivered:

(i) in accordance with a primary curriculum recognised by the education authority of the State or Territory in which the course is delivered; and

(ii) by a school that is recognised as a primary school under the law of the State or Territory; or

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

As you are not a recognised primary school under state law and the Education Minister has not determined the courses you provide to be a primary course your course is not a primary school course.

Secondary course

Paragraph 23 of GSTR 2000/30 describes a secondary course as follows:

23. A secondary course means:

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

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

Under the Education Minister's determination, a secondary course can be delivered by a recognised secondary school, a registered training organisation, a higher education institution or a special school.

As you are not a recognised secondary school, a registered training organisation, a higher education institution or a special school your course is not an education course.

As you are not supplying an 'education course' your supplies are not GST-free. Your supplies fulfil all the elements of a taxable supply under section 9-5 of the GST Act and will attract GST.