Private ruling: Goods and services tax (GST) and education courses
Published: July 2013

Ruling: Q1: Is GST payable on your supply of training programs to students with disabilities and learning difficulties? | A1: No.

Relevant facts and circumstances: You are not registered for GST. However, you are planning to register for GST. You are supplying special education programs (intervention) for primary, secondary and some tertiary students with specific learning disabilities and difficulties. The students are referred to you by a disability foundation, developmental paediatricians or the student's school. These students fall significantly behind in their school work. Students undertaking the programs must have a clinical diagnosis of a learning disability or documented evidence of prolonged and/or pervasive specific learning difficulties. Some of the students have not been diagnosed with a disability, but it is likely that they would have a disability. The cost of the testing required to diagnose a child as having a disability is prohibitive for some parents. Your programs comprise of a series of lessons. Your programs have a literacy and numeracy focus. Your brochure states the aim of the association: The purpose of the intervention programs is to assist students with learning disabilities and difficulties to 'narrow the gap' between their academic performance and that of their unaffected peers, and to teach them strategies which will enable them to access the curriculum on a more equitable basis. All your programs are structured and delivered on a one-to-one basis by specifically trained specialist teachers and tutors. Your teachers monitor the students' progress. Feedback is provided to the students. You modify the programs to meet the special needs caused by various disabilities. This is why the programs are one-on-one. For example, the programs can include the following techniques/content: · phonological awareness exercises. · nonsense words reading and spelling exercises. · multi sensory phonics program (for students with dyslexia). · changing exercises frequently (for ADHD students because it is hard to hold their attention). You have spent a large amount of money on special assistive technology to assist students with disabilities learn, such as a certain program.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1) | A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-85(1) | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: GST is not payable on your supplies of the training programs because they are special education courses. | Detailed Reasoning - Detailed reasoning: GST is payable by you on your taxable supplies. You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states: You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with Australia; and (d) you are *registered, or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (*Denotes a term defined in section 195-1 of the GST Act) In accordance with paragraph 38-85(a) of the GST Act, a supply of an education course as defined in the GST Act is GST-free. In accordance with section 195-1 of the GST Act, 'education course' includes a 'special education course'. A 'special education course' is defined in section 195-1 of the GST Act as a course of education that provides special programs designed specifically for children with disabilities. | Detailed Reasoning - Course of education: Paragraph 14 of Goods and Services Tax Ruling GSTR 2002/1 provides that a course of education is a course or program of study involving systematic instruction, training or schooling. Education is to be given its ordinary meaning of 'acquisition of knowledge, skill etc' and refers to a wide range of knowledge or skill, including sport. Paragraph 15 of GSTR 2002/1 states: In the context of the definition of 'special education course' in section 195-1, a course of education should also be given a wide meaning to include a course or program or study involving the systematic instruction, training or schooling in areas of: · scholastic and academic pursuits; · vocational skills; or · personal development Paragraph 16 of GSTR 2002/1 states: The systematic instruction, training or schooling may be delivered to a group of children or students or to an individual child or student and may take the form of: · a series of lessons or classes; or · a unit or module that forms part of a larger course Paragraph 16 of GSTR 2002/1 states: 16. The systematic instruction, training or schooling may be delivered to a group of children or students or to an individual child or student and may take the form of: · a series of lessons or classes; or · a unit or module that forms part of a larger course. Paragraph 17 of GSTR 2002/1 states: To be a course of education, the systematic instruction, training or schooling also needs to have elements of interactive teaching. Factors that indicate interactive teaching include, but are not limited to: · delivery of educational instruction through an instructor or teacher; · ongoing support and guidance, for example, staff being available to answer; questions; · assessment of the child's or student's progress; · monitoring or supervision; and · provision of feedback concerning the child or student. All your programs are structured and delivered on a one-to-one basis by specifically trained specialist teachers and tutors. Your programs comprise of a series of lessons, the teachers monitor the students' progress, and provide feedback to the students. Your programs have a literacy and numeracy focus. The purpose of the intervention programs is to assist students 'narrow the gap' between their academic performance and that of their unaffected peers and to teach them strategies which will enable them to access the curriculum on a more equitable basis. Hence, your programs involve systematic instruction in areas of scholastic and academic pursuits and they have elements of interactive teaching. Therefore, your programs are courses of education. | Detailed Reasoning - Special program: Paragraph 19 of GSTR 2002/1 states: 19. A program is a special program if it is: · designed specifically to meet the special needs of children with disabilities · designed specifically to reduce or prevent the impact of disabilities for children or students with disabilities; and · not made available to people generally. In accordance with paragraph 30 of GSTR 2002/1, a student is someone who is enrolled in a course of study involving systematic instruction training or schooling in the areas stated in paragraph 15 of GSTR 2002/1. Paragraph 33 of GSTR 2002/1 states: A disability exists where an individual has difficulty in executing activities or has problems in being involved in life situations because some body function or structure is impaired. Paragraph 34 of GSTR 2002/1 provides that children or students with disabilities are those children or students who have a functional or structural impairment that causes them difficulty in executing activities or problems involving life situations. This would include, but is not limited to, conditions that may be diagnosed under the following headings · learning disabilities /specific learning difficulties (including dyslexia); · autism spectrum disorder; · physical disabilities; · emotional disorders; · hearing impairments; · visual impairments; · intellectual disabilities. The students in your case are enrolled in primary, secondary and tertiary education courses, which meet the requirements of paragraph 15 of GSTR 2002/1. Therefore, they are students for the purposes of GSTR 2002/1. Your brochure states the aim of the association.: You supply special education programs (intervention) for primary, secondary and some tertiary students with specific learning disabilities and difficulties, for example: dyslexia, dysgraphia, dyscalculia as well as autism and ADHD. 'Specific learning difficulties' is listed as a category of disability in paragraph 34 of GSTR 2002/1. You modify the programs to meet the special needs caused by various disabilities. This is why the programs are one-on-one. For example, your programs could include the following techniques/content: · phonological awareness exercises. · nonsense words reading and spelling exercises. · multi sensory phonics program (for students with dyslexia). · changing exercises frequently (for ADHD students because it is hard to hold their attention). To assist students with disabilities learn, you have spent a large amount of money on special assistive technology, such as a certain program. The purpose of the intervention programs is to assist students with learning disabilities and difficulties to 'narrow the gap' between their academic performance and that of their unaffected peers and to teach them strategies which will enable them to access the curriculum on a more equitable basis. Students undertaking your programs must have a clinical diagnosis of a learning disability or documented evidence of prolonged and/or pervasive specific learning difficulties. These students are really falling behind in their school work. The students are referred by a disability foundation, developmental paediatricians and schools. You stated that most of the students have been diagnosed with a disability. The others are likely to have a disability, however, the cost of the testing required to diagnose a child as having a disability is prohibitive for some parents. Hence, your programs are: · designed specifically to meet the special needs of children with disabilities · designed specifically to reduce or prevent the impact of disabilities for students with disabilities; and · not made available to people generally. Therefore, your programs are special programs. | Detailed Reasoning - Designed specifically for children or students with disabilities: Paragraph 22 of GSTR 2002/1 states: You need to consider the whole of the circumstances of the creation and delivery of a program to decide whether it is designed specifically for children or students with disabilities. Relevant matters include: · evidence of an intention to design the program for children or students with disabilities; · the character of the program that is provided · the intended recipients of the program; and · any relevant obligations you or others have in providing the program. Paragraph 23 of GSTR 2002/1 states: 23. An intention to design a program for children or students with disabilities may be demonstrated by material that indicates the program is marketed specifically for children or students with disabilities. For example, marketing material may provide details as to how a particular disability will be addressed. Paragraph 24 of GSTR 2002/1 states: 24. The character of a special program may be established by considering its content, the place where it is delivered or how it will be delivered (or a combination of these things). It is these characteristics that will distinguish a program from those that have a character that is not special. Paragraph 25 of GSTR 2002/1 states: 25. A special program needs to be designed specifically for children or students with disabilities. It is not necessary for people with disabilities to be the actual recipients of the program. Paragraph 53 of GSTR 2002/1 provides an example of a program that is designed specifically for children or students with disabilities. It states: 53. A company designs programs for children and students who cannot use a standard keyboard to operate a computer because of their physical disabilities. Marketing statements indicate that these programs are intended for children and students who do not have upper limbs or do not have full use of their upper limbs. These programs are designed to teach children and students computing skills using prosthetic or orthotic aids, modified keyboards and/or voice activated software applications. They are designed specifically for children and students with disabilities because: · marketing material confirms the supplier's intention to provide the programs to children and students with disabilities; and · the programs' content and method of delivery confirms their character as programs designed for children and students with disabilities. Your brochure states the aim of the association.: You modify the programs to meet the special needs caused by various disabilities. This is why the programs are one-on-one. For example, your programs could include the following techniques/content: · phonological awareness exercises. · nonsense words reading and spelling exercises. · multi sensory phonics program (for students with dyslexia) · changing exercises frequently (for ADHD students because it is hard to hold their attention). You have acquired special assistive technology that is designed to assist students with disabilities learn. Your marketing material confirms your intention to provide your programs to students with disabilities. Your programs' content; method of delivery and the places at which they are delivered confirm the programs' character as programs designed for students with disabilities. Therefore, your programs are designed specifically for students with disabilities. Hence, your programs are special education courses because: · they are courses of education; · they are special programs; and · they are designed specifically for children or students with disabilities. Therefore, your supplies of the programs are GST-free supplies of education courses under paragraph 38-85(a) of the GST Act. Hence, GST is not payable on your supplies of the programs.