ATO ID 2003/776: GST and adult and community education courses
Date of decision: 18 February 2003
Business line: Indirect Tax

Issue
Is the entity, a not-for-profit body corporate, 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 which is widely promoted in the community and is not subject to any prerequisite for entry?

Decision
Yes, the entity is making a GST-free supply of an ACE course under section 38-85 of the GST Act when it supplies a course which is widely promoted in the community and is not subject to any prerequisite for entry.

Facts
The entity is a not for profit body corporate that is registered for goods and services tax (GST). It has not been denied recognition as a provider of adult and community education courses by the relevant State or Territory authority. The entity supplies a training course that provides a basic level of skill in the particular area. The skills are relevant to a wide range of occupations or professions. The course is likely to add to employment related skills of the participant in accordance with Goods and Services Tax Ruling GSTR 2000/27. There is no prerequisite by way of a necessary level of knowledge or skill, or of completion of prior training, required by participants to undertake and gain benefit from the course. The course is widely advertised in local papers, posters or fliers distributed around the district and through a number of community organisations. Participants are enrolled on a 'first come - first served' basis. The course is presented by way of a series of lectures, tutorials, discussion groups and practical exercises undertaken by participants in groups. It is not presented by way of private tuition for individuals. The course is not presented by or on behalf of employers to their employees, nor by an organisation only to its members. The course is not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 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 and the Education Minister's Determination A New Tax System (Goods and Services Tax)(Adult and Community Education Courses) Determination 2000 (Education Minister's Determination) provide that an ACE course means a course of study or instruction that is: The entity's course is likely to add to the employment related skills of the participant (in accordance with GSTR 2000/27) and the entity is a not-for-profit body corporate that has not been denied recognition as a provider of adult and community education courses by the relevant State or Territory authority. Therefore, the first and third requirements of an ACE course are satisfied. The second requirement for an ACE course is that it must be of a kind determined by the Education Minister to be an ACE course. At subsection 5(2) of the Education Minister's Determination, the Education Minister states that an ACE course must: The course is not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act. The course is widely advertised in local papers, posters or fliers distributed around the district and through a number of community organisations. Entry to it is not restricted to any particular group or by way of the imposition of an entry prerequisite and participants are enrolled on a 'first come - first served' basis. Therefore, the course is available to adults in the general community. The course is not provided at the request of an employer to employees of that employer or by an organisation for its members and the course is not provided by way of private tuition. As such, the course satisfies the criteria of the Education Minister's Determination and the second requirement of an ACE course is satisfied. As the entity is a not-for-profit body corporate that supplies a course that is likely to add to the employment related skills of participants, and does so in circumstances that are in accordance with the Education Minister's Determination, the entity's supply is an ACE course that is GST-free 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: 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 free GST education Education courses Adult & community education course