Edited version of private advice

Authorisation Number: 1052227146914

Date of advice: 28 February 2024

Ruling

Subject: GST and education courses

Question

Is your supply of the religious preaching course GST-free under Division 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. Your supply of the religious preaching course is taxable under section 9-5 of the GST Act.

This ruling applies for the following period:

xx February 20xx to xx February 20xx

The scheme commenced on:

xx January 20xx

Relevant facts and circumstances

You are a non-profit body registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) with the purpose of advancing religion.

You are registered for GST.

Your course is not formally accredited by a regulatory authority and does not lead to any recognised certificate or qualification.

You have not been refused recognition, nor disqualified, by a State or Territory authority as a provider of adult and community education (ACE) courses because you failed to meet or maintain the standards required by that authority.

To enrol in the course, interested persons must first apply by completing an Application Form.

Applicants are then interviewed by the course director to assess their suitability for enrolment.

For those deemed suitable at the interview stage, reference checks are conducted.

Relevant legislative provisions

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

section 9-5

section 38-85

section 38-220

Reasons for decision

The relevant sections of Division 38 that are of potential application to your supply of the religious preaching course are sections 38-85 and 38-220 of the GST Act. Each is considered in turn.

Section 38-85 of the GST Act provides that a supply of an education course is GST-free. An 'education course' is relevantly defined in section 195-1 to include, amongst other things, an 'adult and community education course.' An ACE course is in turn defined under section 195-1 to mean:

...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 Student Assistance 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 courses 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 of a kind described in the determination; or

(b)  is determined by the Student Assistance Minister to be an adult and community education course.

In A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2016 (the Determination), the Minister has determined at paragraph 6(2)(b) that for the purposes of paragraph (b) of the definition, an ACE course may be provided by a body that:

(i)    is a body corporate that operates on a not-for-profit basis; and

(ii)   has not been refused recognition, or disqualified, by a State or Territory authority as a provider of courses of the kind described in subsection 5(2) of this determination on the basis of failing to meet or maintain the standards required by that authority.

You satisfy both elements.

However, for the religious preaching course to qualify as an ACE course it must satisfy the criteria set out in subsection 5(2) of the Determination, as well as the requirement set out under section 195-1 of the GST Act that it be:

...a course of study or instruction that is likely to add to the employment related skills of people undertaking the course...

Paragraph 5(2)(a) of the Determination is satisfied, as the religious preaching course does not fall within the meaning of any other course mentioned in the definition of 'education course' under section 195-1 of the GST Act.

However, in relation to paragraph 5(2)(b) of the Determination, the religious preaching course is not made available to adults in the general community. That is because enrolment in the course is made subject to a selective admission process. The course, while marketed widely through your website, is not made available on a 'first come - first served' basis whereby the number of available positions acts as the only restriction on enrolment. Rather, enrolment in the course is subject to an applicant being deemed suitable following a written application, an interview with the course director, and formal reference checks.

Therefore, the course is not of a kind specified in the Determination. It is not an ACE course the supply of which is GST-free under section 38-85 of the GST Act.

Section 38-220 of the GST Act provides that the supply of a religious service is GST-free, if it is:

(a)  supplied by a ACNC-registered religious institution; and

(b)  is integral to the practice of that religion.

The religious preaching course does not satisfy paragraph 38-220(b) of the GST Act, as it is not integral to the practice of the religion. While preaching may be integral to the practice of the religion, formal training to develop a person's preaching skills is not integral to that endeavour.

Your supply of the religious preaching course is therefore taxable under section 9-5 of the GST Act, as it is:

(a)  made for consideration; and

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

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

(d)  you are registered.