ATO ID 2003/1185: GST and assessment of prior learning for changing membership status within a professional association
Date of decision: 11 November 2003
Business line: Indirect Tax

Issue
Is the entity, a professional association, 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 one of its members for the purpose of that member changing their membership status from an associate to a fellow?

Decision
Yes, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of one of its members for the purpose of that member changing their membership status from an associate to a fellow.

Facts
The entity is a professional association. The entity supplies a service of assessing the qualifications held by a member for the purpose of that member changing their membership status from an associate to a fellow. 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 assessing the qualifications held by a member. The entity's assessment is for the purpose of that member changing their membership from an associate to a fellow. For the purposes of subsection 38-110(1) of the GST Act, membership of a professional or trade association relates not only to the initial entry into the ranks of that body but to any upgrade or rise in status of the class of membership. As such, the purpose of the entity's supply is for membership of a professional association 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 a professional association. Therefore, the entity's supply is not excluded from being GST-free. Accordingly, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of one of its members for the purpose of that member changing their membership status from an associate to a fellow.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-110 subsection 38-110(1) subsection 38-110(2)
Subject references: Goods and services tax GST free GST education Recognition of prior learning