ATO ID 2004/119: GST and assessment of prior learning for access to informal on-the-job training
Date of decision: 11 November 2002
Business line: Indirect Tax

Issue
Is the entity, a training organisation, making a GST-free supply under section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it assesses the qualifications of a person for the purpose of determining the type of informal on-the-job training that person will require?

Decision
Yes, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of a person for the purpose of determining the type of informal on-the-job training that person will require.

Facts
The entity is a training organisation. The entity provides assessing services. The entity is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services. The entity supplies a service of either assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills. The assessment is for the purpose of determining what informal on-the-job training that person will require. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: A supply is GST-free under subsection 38-110(1) of the GST Act when the supply is the assessment or issue of qualifications for the purpose of: The entity supplies a service of either assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills. The entity's assessment is for the purpose of determining the type of informal on-the-job training that person will require. The GST Act does not define the word 'education', therefore it will take its ordinary meaning. The Macquarie Dictionary , 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales defines 'education': 1. the act or process of educating; the imparting or acquisition of knowledge, skill, etc.; systematic instruction or training. 2. the result produced by instruction, training, or study... Informal on the job training involves the imparting or acquisition of knowledge and skill and accordingly comes within the meaning of education. As such, the entity's supply is for the purpose of access to education and the supply satisfies the requirements in subsection 38-110(1) of the GST Act. However, subsection 38-110(2) of the GST Act provides that a supply is not GST-free under subsection 38-110(1) of the GST Act unless the supply is carried out by: The entity is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services. Therefore, the entity's supply is not excluded from being GST-free under subsection 38-110(2) of the GST Act. Accordingly, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of a person for the purpose of determining the type of informal on-the-job training that person will require. Note: A list of the State or Territory training recognition authorities is available from the National Training Information Service (NTIS) website.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-110 subsection 38-110(1) subsection 38-110(2)
Other references: The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales
Subject references: Goods and services tax GST free GST education Recognition of prior learning