Private ruling: GST and education course
Published: June 2012

Ruling: Q1: What are the GST implications when you deliver a specified course (the course) to students enrolled with a specified registered training organisation (the RTO)? | A1: The supply of the course to the students is a supply made by the RTO. The supply of the course to the students by the RTO is a GST-free supply, if the course is within the scope of the RTO's registration. The supply of your training and assessment services to the RTO is a taxable supply. | Q2: Are your trainers' travel costs associated with the course consideration for a GST-free supply of an education course? | A2: No.

Relevant facts and circumstances: You are registered for GST. You have entered into an arrangement with the RTO for the delivery of the course. You have provided a copy of the agreement between you and the RTO (the agreement). The agreement identifies your and the RTO's responsibilities with regard to the Australian Quality Training Framework (AQTF) 2010. The agreement provides that the AQTF Standard 3.3 requires the RTO to monitor training and/or assessment services provided on its behalf to ensure that they comply with all aspects of the AQTF Essential Conditions and Standards for Continuing Registration. The agreement provides: · The RTO is responsible for the quality of VET services and issuing qualifications. You are involved in the delivery of these services by providing specialist technical training and workplace assessments to meet the performances of the nominated national competencies. · The RTO will issue the qualification stemming from the course. Upon enrolment, the students will have access to the full range of services offered by the RTO as detailed in the RTO's annual Student Guide that must be given to all students upon enrolment each calendar year. All students must be informed of the RTO's responsibility for training, assessment and for the issuance of qualifications prior to enrolment. Students' privacy must be ensured at all times by both parties. Students must comply with both parties' regulations governing conduct. If deemed necessary, any breaches of conduct will be dealt with under the RTO's policies and procedures for student discipline. Students are entitled to recognition and credit transfers as detailed in the RTO's policies and procedures. These will be negotiated on an individual basis and recorded on the appropriate RTO forms and student records. This arrangement between you and the RTO includes organisation-based training with workplace trainers employed by you. The approved workplace trainers are responsible for developing, implementing and recording appropriate learning strategies to meet the needs of each student, the AQTF, the RTO's procedures and any contract requirements that apply to the funding sources that are being used to support the training. To maintain quality assurance in the training activities, your designated trainers must possess the required trainer qualifications. Your trainers must also participate in quality improvement activities including review meetings to consider student and organisational feedback and improvements to training. The assessments may be delivered on the job by workplace assessors employed by you. You are responsible for developing, implementing and recording appropriate assessment strategies to meet the needs of each student, the AQTF, the RTO's procedures and any contract requirements that apply to the funding sources that are being used to support the assessment. Arrangements must be put in place to mitigate any potential or actual conflict of interest in the assessment process. All assessments will be recorded on a system which will be provided by the RTO. All trainers and assessors must provide to the RTO evidence that they possess the required experience and qualifications. You have agreed to supply all assessment records completed by your assessors for the achievement of competency in a timely manner to the RTO. The agreement provides indicative time frames for achievement of competencies. If the RTO cannot claim funding from third parties due to late or missing assessments from your assessors, you will have to pay to the RTO the value of the forfeited funds. You and the RTO must ensure that the appropriate learning resources, materials and equipment are available. The resources and facilities used in the delivery of the specified VET services must meet the requirements of the AQTF, relevant Training Package, course or curriculum and the relevant occupational health and safety standards. All the units which are the subject of the agreement must be up-to-date with the latest policy, training package, curriculum and associated mapping documents for the services being provided. The venues to be used for the particular VET services should allow students to complete the training in an appropriate learning environment in the time required. All student records must be maintained and safeguarded by the RTO in accordance with its policies and procedures. The records that are to be maintained by you and also copied and sent to the RTO include: · enrolment of each student · record of training activities including time, place and unit for each student · student assessments records · risk assessment for training venues All qualifications issued as an outcome of the VET services under the agreement will be issued by the RTO. The RTO will request participants to complete a student satisfaction survey as part of the RTO's continuous improvement activities. The safety of students must be ensured at all times. As this program is conducted in the workplace, you must comply with OH&S legislation for your worksite and employees, and as such must have a site safety plan, safe work method statements and associated risk assessments. You and the RTO must ensure that Public Liability and Professional Indemnity policies of insurance cover any claim from or related to the provision of the services under the agreement. You and the RTO must agree on any arrangements for the marketing or promotion of the specified VET services and all marketing must comply with the RTO's marketing policies and procedures. The program may be reviewed at any time on request by either party as well as prior to the commencement of any replacement agreement. Fees and any other financial arrangements are detailed in a specified document separate to the agreement which states that you accept the RTO's proposal for delivery of the above training as $X enrolment fee per participant. You have been providing this course for a number of years. You approached the RTO as you wanted your course to be certified. The clients approach you directly. You invoice the clients (which are generally the employers) directly. You confirmed that the students are enrolled with the RTO. The RTO invoices you $X per student for issuing the certificate to the students. The certificates are issued in the name of the RTO. You have been charging the students GST for the supply of the course. You charge around $Y per student for the supply of the course. The cost could be more for example if the trainers have to travel. The travelling cost is a separate charge. The course is a one day course. You are neither an RTO nor a tertiary education institution.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5. | A New Tax System (Goods and Services Tax) Act 1999 section 38-85.

Reasons for decision: Summary: The supply of the course to the students is a supply made by the RTO. The supply of the course to the students by the RTO is a GST-free supply if the course is within the scope of the RTO's registration. The supply of your training and assessment services to the RTO is a taxable supply. | Detailed Reasoning - Detailed reasoning: Section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that a supply of an education course is GST-free. The definition of an 'education course' is provided in section 195-1 of the GST Act and includes, amongst other things, a tertiary course. To be GST-free as a tertiary course, a course must satisfy the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 ; Determination of education institutions and courses under subsections 3(1) and 5D(1) of the Students Assistance Act 1973 Determination No. 2002/1 (Determination 2002/1). Determination 2002/1 provides that a course leading to the attainment of a competency for a qualification under the Australian Quality Training Framework (AQTF) that is specified in an endorsed training package is a vocational education and training programme. A vocational education and training programme, conducted by either a higher education institution or an RTO is a tertiary course. A course is considered to be conducted by an RTO where the enrolment of students is with that body, the RTO takes responsibility for the maintenance of presentation and assessment standards, and the qualification stemming from the course is issued by the RTO. In your case, the students are enrolled with the RTO. The RTO oversees the maintenance of standards as it is required to monitor the training and assessment services provided on its behalf to ensure that they comply with all aspects of the AQTF Essential Conditions and Standards for Continuing Registration. The RTO is responsible for the quality of VET services and issuing the qualifications. Based on the above, the RTO is the supplier of the course to the students who are enrolled with it. Under the agreement, you are providing the training and assessment services to the students on behalf of the RTO. In other words, there are two supplies in this situation. You are supplying training and assessment services to the RTO and the RTO is supplying the education course to the students. The supply of the course to the students by the RTO would be a GST-free supply of a tertiary course provided the course is within the scope of the RTO's registration. Your supply of training and assessment services to the RTO is not a supply of an education course. The supply of your services to the RTO is a taxable supply if all the requirements of section 9-5 of the GST Act are met. Section 9-5 of the GST Act provides that you make a taxable supply where all the following requirements are met: · you make the supply for consideration · the supply is made in the course or furtherance of an enterprise that you carry on · the supply is connected with Australia · you are registered or required to be registered for GST, and · the supply is neither GST-free nor input taxed. The supply of your services to the RTO is a taxable supply as it meets all the requirements of section 9-5 of the GST Act. Therefore, you are making a taxable supply under section 9-5 of the GST Act when you supply training and assessment services to the RTO. The payments that you collect from the students which you do not pass on to the RTO are consideration for the taxable supply of your training and assessment services to the RTO. You are liable to pay GST equal to 1/11 of the amount retained from the fees collected from the students. If requested by the RTO, you would need to issue tax invoices for the supply of your services to the RTO. In summary, there is a supply of an education course by the RTO to the students and a supply of training and assessment services by you to the RTO. You may wish to reassess your operating procedures with the RTO in regard to the accounting process presently undertaken in regard to the collection of the course fees from the students and the payment of your remuneration for the provision of the training and assessment services. | Summary: Your trainers' travel costs associated with the course are not consideration for a GST-free supply of an education course. | Detailed Reasoning - Detailed reasoning: You charge your clients a separate fee for travel, if your trainers incur travel costs associated with the course. The travel fee is consideration for a separate supply that you make to the students/client's and is not considered to be part of the consideration for the supply of the tertiary course by the RTO. The supply is a taxable supply as it meets all the requirements of section 9-5 of the GST Act. You are liable to pay GST equal to 1/11 of the fees that you charge in respect of your trainers' travel costs.

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