Edited version of private advice

Authorisation Number: 1052212591687

Date of advice: 18 January 2024

Ruling

Subject: GST and special education courses

Question

Are your supplies of the literacy intervention (synthetic phonics) courses GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

Question

If so, are your supplies of the literacy intervention (synthetic phonics) courses GST-free under section 38-85 of the GST Act, where the course is provided to children without a diagnosed disability?

Answer

Yes.

This ruling applies for the following period:

xx xxx 20xx to xx xxx 20xx

Relevant facts and circumstances

You carry on a speech pathology and education business.

You are registered for GST.

You have designed specialist literacy intervention (synthetics phonics) courses to assist children with specific learning difficulties (SLDs), including dyslexia and dysgraphia. You make the courses available to children who are either formally diagnosed with dyslexia or dysgraphia, or who you consider have dyslexia or dysgraphia although not formally diagnosed. You do not make the courses available to children whose literacy skills meet or exceed the average standard.

The courses are not designed for typically developing students, and as such incorporate special elements that are not included in the standard school curriculum. The design of the courses incorporates principles from dyslexia and dysgraphia training approaches. These approaches both advocate for explicit, systematic, structured, and cumulative instruction targeted to dyslexic and dysgraphia learners.

The marketing material on your website markets the courses as early intervention services for children with dyslexia and related SLDs.

You deliver two literacy intervention (synthetic phonics) courses that are subject of this private ruling application. Each is set out in turn.

1)    Course One

The course is explicitly designed for children with dyslexia or dysgraphia.

Prior to beginning the course, children undergo screening and assessment with a Dyslexia Consultant. This information drives the development of a profile of the child's literacy strengths and weaknesses.

There are distinct characteristics associated with dyslexia and dysgraphia which are examined through this process. If children are flagged as potentially having underlying language deficits, caused by another SLD or an overall cognitive impairment, they are referred to another service for assessment. If moderate to severe cognitive impairment is suspected, you recommend that those children find appropriate intervention elsewhere.

The course content is delivered at a pace appropriate to the child as no two students present dyslexia or dysgraphia symptoms in the same way. Modification of the pace of the content is made according to each child's needs.

An instructor is present to answer any questions and to conduct interactive learning activities with the child.

The course is delivered on a 1:1 student to instructor ratio and is a prerequisite to course 2.

2)    Course 2

The course is explicitly designed for children with dyslexia or dysgraphia.

It is targeted to assist children with dyslexia or dysgraphia to develop accurate and fluent word reading and spelling.

The course is delivered on a on a 4:1 student to instructor ratio. The instructors are present and highly interactive throughout the whole session assisting each child.

At the beginning of each course, each child is individually assessed utilising assessment tools to determine their reading and spelling ability. These assessments are repeated periodically throughout the courses and at the conclusion of each course. This ongoing assessment / monitoring allows the instructors to track the child's progress through the course and ascertain whether the child has acquired the relevant learning.

Feedback is provided verbally to the child during each course. The child's parent/s or guardian/s are present for each session to hear this feedback.

The instructors of the courses participate in weekly mentoring and coaching with qualified specialists to ensure high quality delivery of the course. All course instructors have qualifications in a relevant discipline and further post-graduate training in synthetics phonics.

Relevant legislative provisions

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

Section 38-85

Section 195-1

Reasons for decision

Question 1

A supply of an education course is GST-free under paragraph 38-85(a) of the GST Act.

An education course is defined in section 195-1 of the GST Act to include, amongst other things, a special education course.

The term 'special education course' is defined under section 195-1 of the GST Act to mean:

...a course of education that provides special programs designed specifically for children with disabilities or students with disabilities (or both).

The Commissioner's view on the meaning of 'special education course' is set out in Goods and Services Tax Ruling GSTR 2002/1 Goods and services tax: supplies that are GST-free as special education courses (GSTR 2002/1).

The Commissioner considers at paragraphs 40 to 41 of GSTR 2002/1 that whether a special education course is GST-free depends on the attributes of the course, and not on the status of the course provider:

40. Where all of the requirements of the section 195-1 definition of a special education course are satisfied, the course is GST-free, regardless of who provides the course.

41. A special education course is not restricted under the GST Act to programs that are provided by a school, special school, government centre or non-government centre.

Your literacy intervention (synthetics phonics) courses will meet the requirements of a special education course, if:

•         they are courses of education;

•         they provide special programs; and

•         the special programs are designed specifically for children with disabilities or students with disabilities (or both).

The Commissioner accepts that SLDs are a functional or structural impairment that amounts to a disability for the purposes of this definition (GSTR 2002/1, paragraph 34).

Course of Education

Your courses are 'courses of education' as they are programs of study involving systemic schooling of scholastic and academic pursuits (GSTR 2002/1, paragraphs 14 to 15). Both courses provide systematic education to children through a series of interactive lessons.

Paragraphs 16 to 17 of GSTR 2002/1 provide elements and factors that are indicative of a course of education, including:

•         delivery of educational instruction through an instructor or teacher;

•         ongoing support and guidance, for example, staff being available to answer questions;

•         assessment of the child's or student's progress;

•         monitoring or supervision; and

•         provision of feedback concerning the child or student.

The continuance of ongoing instruction, assessments, monitoring, support, and feedback throughout the courses are elements of a course of education. Additionally, feedback is provided directly to the parent/s or guardian/s on their child's development through their individual tutoring program.

Special Program

Your programs have a special character that distinguishes them from general education services. They are designed specifically, and delivered in such a way, to meet the needs of children with SLDs.

Designed Specifically for Children with Disabilities

It is necessary to consider the whole of the circumstances of the creation and delivery of a program to decide whether it is designed specifically for children or students with disabilities. At paragraph 22 of the GSTR 2002/1, the commissioner sets out relevant matters to be considered:

•         evidence of an intention to design the program for children or students with disabilities;

•         the character of the program that is provided;

•         the intended recipients of the program; and

•         any relevant obligations you or others have in providing the program.

In your case, your intention to design an early intervention (synthetics phonics) course for children with disabilities is demonstrated by the marketing material on your website. Your services are marketed specifically as an early intervention service to help children with SLDs. The courses are explicitly designed for children with dyslexia or dysgraphia and aim to address these SLDs and mitigate any potential secondary consequences.

Your early intervention (synthetics phonics) courses have the characteristics of a special program as the content and methods of delivery are designed for children with SLDs. You employ principles from dyslexia and dysgraphia training approaches in your courses. These approaches advocate for explicit, systematic, structured, and cumulative instruction for dyslexic and dysgraphic learners. You use interactive learning tools to assist children with SLDs to learn more effectively and engage in the courses. The courses contain targeted drills, knowledge, and skills to specifically address the needs of children with dyslexia or dysgraphia.

Course 1 is offered on a 1:1 basis to deliver education that is both specialised and personalised. It is a prerequisite for Course 2, where the lessons are delivered in a small group of 4 children to 1 instructor.

It is accepted that your programs are designed specifically for children with SLDs.

Your literacy intervention (synthetic phonics) courses therefore satisfy the requirements of a 'special education course'. Where you charge a fee for the supply of an education course, this fee is GST-free under paragraph 38-85(a) of the GST Act.

Question 2

As per paragraph 25 of GSTR 2002/1:

25. A special program needs to be designed specifically for children or students with disabilities. It is not necessary for people with disabilities to be the actual recipients of the program.

Your supplies of the literacy intervention (synthetic phonics) courses will be GST-free under s 38-85 of the GST Act, where the courses are provided to children without a diagnosed disability. As addressed in Question 1, It is sufficient that the courses are designed specifically for children with disabilities.