Edited version of private advice

Authorisation Number: 1051801227548

Date of advice: 10 February 2021

Ruling

Subject: GST and education courses

Question

Is the Safety Course provided by (you) to trainees a GST-free education courses under Division 38-C of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No, the Safety Couse provided by you is not considered a GST-free education course under Division 38-C of the GST Act.

The scheme commences on:

1 December 20XX

Relevant facts and circumstances

You are a partnership and registered for GST.

Workers employed in certain higher risk industries must be provided with specialised training and resources including safe work practices and risk controls to enable them to carry out their tasks when working on and particular equipment.

In all states Occupation Health and Safety Laws include the requirement for training.

Safety Standards have been established/published by an agency (the Agency). These Safety Standards have been obtained as part of this ruling request.

The Standards are established to prevent adverse health effects when working on/with particular equipment.

You offer an online course (Safety Course or the Course) to trainees. A copy of the curriculum, the Course slides and assessment has been provided as part of this ruling request.

In general, the Course can be completed by members of the industry, prior to working at certain sites across Australia that may be hazardous.

The Course curriculum is designed to provide students/staff the necessary training and information required to operate safely in the work environment.

The Course is part of a trainee's employment requirement and must be completed every three years or earlier as required by site owners or employers. Records are kept by you and certificates of completion issued to trainees.

The course is completed by the student online and assessment is a series of questions and answers over the five sections of the course. The curriculum requires a minimum score of 80% in each section for a course pass. Students who do not reach this score are required to repeat the training course.

Students can log onto the site at any time to refresh their knowledge for a period of up to three years before they are required to formally complete the course again.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 - section 38-85

A New Tax System (Goods and Services Tax) Act 1999 - section 38-110

A New Tax System (Goods and Services Tax) Act 1999 - section 195-1

A New Tax System (Goods and Services Tax) Act 1999 - section 9-5

A New Tax System (Goods and Services Tax) Act 1999 - section 9-40

Reasons for decision

Summary

The Safety Couse provided by you is not considered a GST-free education course under Division 38-C the GST Act.

Detailed reasoning

Section 9-40 of the GST Act provides that you are liable for GST on any taxable supply that you make.

Section 9-5 of the GST Act, provides 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 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.

Section 38-85 of the GST Act provides that an education course is GST-free. The definition of education course in section 195-1 of the GST Act includes a professional or trade course.

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.

Goods and Services Tax Ruling GSTR 2003/1 Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1) provides guidance on when a course meets the requirements of GST-free professional or trade course as defined in section 195-1 of the GST Act. Paragraph 9 of GSTR 2003/1 states:

9. For the purposes of the definition of a 'professional or trade course' the term 'essential prerequisite' is defined in section 195-1 in the following terms:

'a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed:

(a)  by or under an industrial instrument; or

(b)  if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or

(c)   if neither paragraph (a) nor (b) applies but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association.'

Paragraph 92 to 97 in GSTR 2003/1 discusses whether a specialisation can be a separate profession or trade. Relevantly it states:

92. For the purposes of the definition of a 'professional or trade course' in section 195-1, a distinction must be drawn between a course that provides a qualification to enter into a profession or trade and one that is undertaken to acquire specialist or additional skills within that profession or trade.

93. A course leading to a qualification that merely enhances a recipient's proficiency to undertake a wider range of activities in his or her profession or trade, is not a professional or trade course.

94. For a specialisation to be characterised as a separate profession or trade, its attributes must be more than merely a set of additional skills or endorsements that enable a person to undertake different tasks within their profession or trade. Whether a specialisation within a profession or trade in a broader sense is a separate profession or trade will require a practical judgment having regard to a range of factors in each case, including whether:

•       the specialisation services a different client base;

•       the tasks performed are in a different field of learning or science;

•       the specialisation is covered by an industrial instrument that specifically deals with that specialisation;

•       the specialisation has its own distinct professional or trade association that determines the educational or qualification requirements for entry into that specialisation; and

•       any additional study of significant duration is required in order to perform the tasks in that specialisation.

Example 9 - a course that provides additional skills

95. Graeme is employed as a heavy vehicle driver and holds the appropriate licence. He decides that he would increase his opportunities for advancement by possessing a flammable goods/dangerous goods licence. A dangerous goods vehicle driver is not in a different trade to a heavy vehicle driver. While a course for heavy vehicle drivers that provides this qualification may enhance his skills and employment prospects, he has already entered the trade of heavy vehicle driver. The 'dangerous goods licence' course is not a professional or trade course, as it does not lead to a qualification that is an essential prerequisite.

96. There are numerous industrial instruments that require a person to obtain approval or certification before a particular task 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.

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.

Consistent with the discussion in paragraphs 92 to 97 in GSTR 2003/1 we consider that the supply of the Course is not an essential prerequisite to the entry to, or the commencement of a particular profession or trade. Rather the Course provides additional skills to trainees which operate in a particular work environment.

As such the supply of the Course is not considered GST-free for the purposes of the GST Act.