ATO ID 2003/1097: GST and adult and community education courses provided to non-resident students
Date of decision: 2 March 2001
Business line: Indirect Tax

Issue
Is the entity, an Australian based campus of an overseas university, making a GST-free supply of an adult and community education (ACE) course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a course that is only open to non-resident students with tertiary qualifications?

Decision
No, the entity is not making a GST-free supply of an ACE course under section 38-85 of the GST Act when it supplies a course that is only open to non-resident students with tertiary qualifications as the course is not available to adults in the general community. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts
The entity is an Australian based campus of an overseas university. The entity is a not-for-profit body corporate and is registered for goods and services tax (GST). The entity supplies a course to non-resident students that are in Australia. The entity's course is designed to develop job skills and include, but are not limited to, courses in field research. The course application is made through the overseas university with registration and all fees paid to that university. The course is advertised off shore and the course is only available to non-resident applicants who have tertiary qualifications. Applicants are then selected for the course through a selection process. The entity is not a registered training organisation or a State or Territory accredited place of higher education. The entity's course is not of a kind mentioned in any other paragraph of the definition of an education course in section 195-1 of the GST Act. The supply satisfies the positive limbs of section 9-5 of the GST Act.

Reasons for decision
Summary: The supply of an 'education course' is GST-free under section 38-85 of the GST Act. 'Education course' is defined in section 195-1 of the GST Act to include, amongst other things, an ACE course. Section 195-1 of the GST Act provides, amongst other things, that an ACE course must be of a kind determined by the Education Minister to be an adult and community education course. The Minister's determination is contained in A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (the Determination). One of the requirements for a course to be of a kind described in the Determination is that the course must be available to adults in the general community. The entity supplies its course to non-resident students in Australia. The course application is made through the overseas university with registration and all fees paid to that university. The course is advertised off shore and the course is only available to non-resident applicants who have tertiary qualifications. Applicants are then selected for the course through a selection process. As the course is not available to Australian residents, and there are prerequisites for entry, the course is not available to adults in the general community. As such, the course is not of a kind specified in the Determination and is not an ACE course that is GST-free under section 38-85 of the GST Act. The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not GST-free under any other provision in Division 38 of the GST Act, nor is it input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies a course that is only open to non-resident students with tertiary qualifications.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 Division 38 section 38-85 Division 40 section 195-1
Related public rulings and determinations: Goods and Services Tax Ruling GSTR 2000/27
Other references: A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000
Subject references: Goods and services tax GST education Education courses Adult & community education course Taxable supply