Private ruling: Goods and services tax (GST) and education courses
Published: June 2014

Ruling: Q1: Is the tuition supplied by you to the students enrolled in your school and delivered by external tutors GST-free? | A1: Yes | Q2: Is the tuition supplied by you to the members of the general public and delivered by external tutors GST-free? | A2: No.

Relevant facts and circumstances: You are a combined primary and secondary school. You are registered for GST. You are an endorsed charity. Part of your operations includes the provision of individual and group tuition to both enrolled students and members of the general public. You engage external tutors to deliver this tuition and you invoice the users of this service. You manage the delivery of the tuition by the external tutors. The tutors provide their services to you. You pay and are liable to pay the external tutors for their services. The tuition takes place both during school hours and after hours. The enrolled students may be taking the lessons during school hours, after school hours or both. The lessons are not compulsory for any of the students. The tuition is related to the school's curriculum. Many of the enrolled students are also involved in certain school activities. You do not supply the tuition for less than 50% of the GST inclusive market value of the supply. You do not supply the tuition for less than 75% of your cost of supplying the tuition.

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(a) | A New Tax System (Goods and Services Tax) Act 1999 section 38-250 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: Your supplies of tuition to the students enrolled in your school are part of a GST-free supply of an education course. | Detailed Reasoning - Detailed reasoning: You must pay the GST payable on any taxable supply that you make. 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 (a) the supply is *connected with Australia; and (b) 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 the GST Act) Your supplies of tuition meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because: • you make these supplies for consideration • you make these supplies in the course or furtherance of an enterprise that you carry on • these supplies are connected with Australia, and • you are registered for GST. There are no provisions in the GST Act under which your supplies of tuition are input taxed. Therefore, what remains to be determined is whether your supplies of tuition are GST-free. Paragraph 38-85(a) of the GST Act provides that a supply of an education courses is GST-free. In accordance with section 195-1 of the GST Act, the definition of 'education course' includes, among other things, a primary course and a secondary course. Primary course is defined in section 195-1 of the GST Act. It states: primary course means: (a) course of study or instruction that is delivered: (i) in accordance with a primary curriculum recognised by the education authority of the State or Territory in which the course is delivered; and (ii) by a *school that is recognised as a primary school under the law of the State or Territory; or (b) any other course of study or instruction that the *Education Minister has determined is a primary course for the purposes of this Act. Secondary course is defined in section 195-1 of the GST Act. It states: secondary course means: (a) a course of study or instruction that is a secondary course determined by the *Education Minister under subsection 5D(a) of the Student Assistance Act 1973 for the purposes of that Act; or (b) any other course of study or instruction that the *Education Minister has determined is a secondary course for the purposes of this Act. Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) provides that accredited secondary courses supplied by secondary schools are secondary courses. You are a school that supplies GST-free primary and secondary courses. Goods and Services Tax Ruling GSTR 2000/30 sets out the Australian Taxation Office view on supplies that are GST-free for pre-school, primary and secondary education courses. Paragraphs 42 to 47 of GSTR 2000/30 discuss the supply of activities that are related to a primary school or secondary school curriculum. They state: 42. The supply of curriculum related activities is part of the supply of an education course. Curriculum related activities include visits to you by organisations such as animal farms, theatre companies and science fairs. 43. The supply of curriculum related instruction is part of the supply of an education course. Curriculum related instruction includes instruction by external tutors or any third parties engaged by you to deliver part or all of the curriculum. It also includes remedial and advanced (extension) teaching provided by you for individual students. 44. As the supply of curriculum related activities and instruction is part of the supply of an education course, it is irrelevant whether the amount charged for the activity or instruction is included in the fee you charge for the course or whether it is charged separately. The amount charged must be paid to you, as the supplier of the education course. If the amount charged for the activities or instruction is paid by students to the provider of the activities or instruction, it is not GST-free to students as a supply of an education course. 45. However, if the provider is approved by the relevant state or territory body to conduct a pre-school, primary or secondary course, the supply made to students is the supply of an education course in its own right and is GST-free. 46. If the supply of the activity or instruction to you is made by an entity that is registered or required to be registered, the supply to you is a taxable supply and the amount you pay for the activities or instruction includes GST. You are entitled to input tax credits in respect of the GST paid on the acquisitions by you of activities or instruction. The subsequent supply that you make to students is GST-free. | Detailed Reasoning - Example - Remedial Teaching: 47. Georgia is a Year 7 student and the school engages a private tutor to assist Georgia with her reading skills. The private tutor charges the school a GST inclusive fee. Engaging the services of private tutors to assist students with learning difficulties is a creditable acquisition and the school is entitled to an input tax credit for the GST paid. The subsequent supply by the school to Georgia is GST-free. In your case, you are a school that supplies GST-free primary and secondary courses. You are supplying the tuition in question to the enrolled students and members of the general public. You engage external tutors to deliver the tuition to the students and members of the general public. You pay and are liable to pay the tutors for their supplies of teaching services to you. You invoice the users of your services. You also advised that the tuition that you supply is related to the school's curriculum. Based on the information that you have provided, your supply of tuition to the students enrolled in your school is GST-free as these are curriculum related activities and therefore part of a supply of a primary or secondary course. Therefore, your supplies of tuition to the students enrolled in your school are not taxable supplies as they do not meet all the requirements of section 9-5 of the GST Act. Hence, you are not liable to pay GST on your supplies of tuition to the students enrolled in your school. | Summary: Your supplies of tuition to the members of the general public are taxable supplies as the supplies are not part of a supply of a GST-free education course. | Detailed Reasoning - Detailed reasoning: As you are not supplying a primary or secondary course to the members of the general public, your supply of tuition to them is not part of a supply of a primary or secondary course. Therefore, your supplies of tuition to the members of the general public are not GST-free under paragraph 38-85(a) of the GST Act. There are no other provisions in the GST Act under which your supplies of tuition to the members of the general public are GST-free. As all the requirements of section 9-5 of the GST Act are met, your supplies of tuition to the members of the general public are taxable supplies. Hence, GST is payable by you on these supplies.