ATO ID 2005/248: GST and English language courses for foreign nationals
Date of decision: 30 August 2005
Business line: Indirect Tax

Issue
Is the entity, a provider of English language courses, making a GST-free supply of an English language course for overseas students under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies courses to foreign nationals in Australia who enter Australia on a temporary visa that does not contain a 'no study' condition?

Decision
Yes, the entity is making a GST-free supply of an English language course for overseas students under section 38-85 of the GST Act when it supplies courses to foreign nationals in Australia who enter Australia on a temporary visa that does not contain a 'no study' condition.

Facts
The entity is an English language course provider. The entity provides English language courses that consist of classroom tuition, excursions and activities. The entity is accredited and listed on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). The entity only provides courses to foreign nationals who are in possession of a student visa or one of various temporary visas (that do not contain a 'no study' clause) issued by the Department of Immigration and Multicultural and Indigenous Affairs. These foreign nationals decide to seek formal English language instruction during their stay. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: The supply of an education course is GST-free under section 38-85 of the GST Act. The definition of an education course includes, amongst other things, 'an English language course for overseas students'. An English language course for overseas students is defined in section 195-1 of the GST Act as a course of study or education supplied to overseas students that: An overseas student in this context is a foreign national who holds a student visa or another form of temporary visa (excluding a visa that is subject to a 'no study' condition (condition 8207)) and who is enrolled to study in Australia. The entity only provides courses to foreign nationals whose temporary visas do not contain a 'no study' condition and therefore, the entity is supplying the courses to overseas students. The entity is supplying the overseas students with tuition in the English language and it is accredited and listed on the CRICOS. Therefore, the entity is making a GST-free supply of an English language course for overseas students under section 38-85 of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-85 section 195-1
Related public rulings and determinations: GSTR 2001/1
Subject references: Goods and services tax GST free GST education Education courses English language course for overseas students