Edited version of private advice

Authorisation Number: 1052162758436

Date of advice: 29 August 2023

Ruling

Subject: GST - education

Question 1

Is your supply of a website-based mathematic course and course material GST-free under Division 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when the supply is made directly to a primary or secondary student?

Answer

No. Your supply of the website-based mathematic course does not meet the definition of an 'education course', more relevantly it does not satisfy the requirements of 'a primary course and/or 'a secondary course' as defined in section 195-1 of the GST Act. Therefore, you are not making a GST-free 'education course' under section 38-85 of the GST Act and your provision of course material is also not GST-free under section 38-95 of the GST Act when provided directly to a student.

A supply you make will be a taxable supply when it is made for consideration, and it is in the course of your enterprise, and it is connected with Australia, and you are registered for GST (section 9-5 of the GST Act).

Question 2

Is your supply of a website-based mathematic course and course material (web course) GST-free under Division 38 of the GST Act when the supply is made to a school acting as agent for a primary or secondary student?

Answer

No. Your supply of the website-based mathematic course does not meet the definition of an 'education course', more relevantly it does not satisfy the requirements of 'a primary course' and/or 'a secondary course' as defined in section 195-1 of the GST Act. Therefore, you are not making a GST-free 'education course' under section 38-85 of the GST Act and your provision of course material is also not GST-free under section 38-95 of the GST Act.

A supply you make will be a taxable supply when it is made for consideration, and it is in the course of your enterprise, and it is connected with Australia, and you are registered for GST (section 9-5 of the GST Act).

The Commissioner does not need to turn his mind to the agency relationship between the schools and the students as it is not relevant in determining whether the course is a GST-free supply of an education course under section 38-85 of the GST Act.

Question 3

Is your supply of a website-based mathematic course and course material GST-free under Division 38 of the GST Act when the supply is made directly to a school and the school gives access to the things supplied to its students?

Answer

A supply you make will be a taxable supply when it is made for consideration, and it is in the course of your enterprise, and it is connected with Australia, and you are registered for GST (section 9-5 of the GST Act).

Your supply of a website-based mathematic course does not meet the definition of an education course, more relevantly you do not satisfy the requirements of 'primary course and 'secondary course' under section 195-1 of the GST Act. Therefore, you are not making a GST-free 'education course' under section 38-85 of the GST Act and your provision of course material is also not GST-free under section 38-95 of the GST Act when provided directly to a school and the school gives access to the things supplied to its students.

This ruling applies for the following period:

Year ending 30 June 2024

Year ending 30 June 2025

The scheme commences on:

1 January 2024

Relevant facts and circumstances

You have an active Australian Business Number since XXX.

You are currently registered for Goods and Services Tax.

You operate XXX that enables the delivery of mathematical courses and other mathematics course materials and resources to school students from Year K to Year 12 to help students achieve their goals and learning outcomes.

You provided that each of your website-based mathematical courses is designed having regards to and based on the mathematics curriculum as articulated in the Australian school curriculum.

Only primary and secondary school students access your courses via the website using the access protocol described below.

[omitted]

You are not a school that is recognised as a primary school under the law of a State or Territory.

You are not an education institution and has no relevant accreditation in relation to the secondary course supplied.

[omitted]

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999

Section 9-5

Section 38-85

Section 38-95

Section 195-1

Reasons for decision

Question 1

Under section 9-5 of the GST Act, you make a taxable supply if:

(a)  You make a 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.

Section 9-40 of the GST Act states that 'you must pay the GST payable on any taxable supply that you make'.

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

There are no provisions in the GST Act under which your supply of course and course material are input taxed.

Section 38-85 of the GST Act provided that:

A supply is GST-free if it is a supply of:

(a)  An education course; or

(b)  Administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

Section 38-95 of the GST Act provided that:

A supply of course materials for a subject undertaken in an education course is GST-free.

Section 195-1 of the GST Act further defines course materials as in relation to an education course means materials provided by the entity supplying the course the necessarily consumed or transformed by the students undertaking the course for the purposes of the course.

Section 195-1 of the GST Act provided that:

Education course means:

(a)  A pre-school course; or

(b)  A primary course; or

(c)   A secondary course; or

(d)  A tertiary course; or

(e)  (Repealed by No 143 of 2007)

(f)    A special education course; or

(g)  An adult and community education course

(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 defined in the GST Act and for your supply to be GST-free, your supply of courses and course material must satisfy the definition of one of the above education courses.

[omitted]

Section 195-1 of the GST Act defines 'primary course' as:

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 Student Assistance Minister has determined is a primary course for the purposes of this Act.

[omitted]

Section 195-1 of the GST Act defines 'secondary course' as:

Secondary course means:

(a)  A course of study or instruction that is a secondary course determined by the Student Assistance Minster 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 Student Assistance Minister has determined is a secondary course for the purposes of this Act.

The Student Assistance (Education Institutions and Courses) Determination 2019 (Education 2019/1) which is an instrument made under subsections 3(1) and 5D(1) of the Student Assistance Act 1973, explains under section 10 that for paragraph 5D(1) of that Act, a secondary course is a course:

(a)  Specified in Column 1 of the table in Schedule 1 to this instrument that is provided by an education institution specified for that course in Column 2 of that table; or

(b)  Provided by a secondary school, a registered training organisation or a higher education institution that leads to an accredited secondary course qualification involving:

(i)    Accredited secondary course subjects; or

(ii)   A VET course.

Schedule 1 Secondary courses (section 10)

As explained in 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 depending on the type of course listed under secondary courses.

[omitted]

As your supply of an education course does not meet the definition of an education course under the GST Act, the supply of course material related to the course is also not GST-free under section 38-95 of the GST Act.

Question 2

A supply you make will be a taxable supply when it is made for consideration, and it is in the course of your enterprise, and it is connected with Australia, and you are registered for GST (section 9-5 of GST Act).

[omitted] Therefore, you are not making a GST-free 'education course' under section 38-85 of the GST Act and your course material is not GST-free under section 38-95 of the GST Act when the supply is made to a school acting as agent for a student.

Question 3

As explained under detailed reasoning for Question 1, the course you provide is not a GST-free education course and you are not a recognised school or provider for primary course nor secondary course.

Goods and Services Tax Ruling 2000/30 Goods and services tax: supplies that are GST-free for pre-school, primary and secondary education courses explains which supplies related to such education courses are GST-free under Subdivision 38-C of the GST Act.

GSTR 2000/30 only applies to pre-school, primary and secondary courses. 'You' in the paragraphs below references the supplier of such a course.

Paragraphs 42 to 47 of the GSTR 2000/30 discuss curriculum related activities and instruction:

42. The supply of curriculum related activities is part of the supply of an education course. Curriculum related activities include visits to you by organisations such as animal farms, theatre companies and science fairs.

43. The supply of curriculum related instruction is part of the supply of an education course. Curriculum related instruction includes instruction by external tutors or any third parties engaged by you to deliver part or all of the curriculum. It also includes remedial and advanced (extension) teaching provided by you for individual students.

44. As the supply of curriculum related activities and instruction is part of the supply of an education course, it is irrelevant whether the amount charged for the activity or instruction is included in the fee you charge for the course or whether it is charged separately. The amount charged must be paid to you, as the supplier of the education course. If the amount charged for the activities or instruction is paid by students to the provider of the activities or instruction, it is not GST-free to students as a supply of an education course.

45. However, if the provider is approved by the relevant state or territory body to conduct a pre-school, primary or secondary course, the supply made to students is the supply of an education course in its own right and is GST-free.

46. If the supply of the activity or instruction to you is made by an entity that is registered or required to be registered, the supply to you is a taxable supply and the amount you pay for the activities or instruction includes GST. You are entitled to input tax credits in respect of the GST paid on the acquisitions by you of activities or instruction. The subsequent supply that you make to students is GST-free.

Example - Remedial Teaching

47. Georgia is a Year 7 student and the school engages a private tutor to assist Georgia with her reading skills. The private tutor charges the school a GST inclusive fee. Engaging the services of private tutors to assist students with learning difficulties is a creditable acquisition and the school is entitled to an input tax credit for the GST paid. The subsequent supply by the school to Georgia is GST-free.

[omitted]

You asked the Commissioner to assume that the course is only delivered by a school to the secondary students and that each such school is either a recognised secondary school or a special school for the purposes explained in the Student Assistance (Education Institutions and Courses) Determination 2019. However, for the supply of education course to be GST-free, you need to be a recognised provider approved by the relevant state or territory body to conduct primary or secondary courses in your own right (paragraph 45 of GSTR 2000/30).

As you are supplying your course directly to schools and are registered for GST, your supply will be subject to GST under section 9-5 of the GST Act.