Private ruling: GST and education
Date of advice: 8 September 2022
Published: November 2022
Ruling period: 1 July 20XX - 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is Entity 1 providing a GST-free supply to Entity 2 under section 38-85 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, Entity 1 is not providing a GST-free supply to Entity 2 under section 38-85 of the GST Act. Entity 1 is making a taxable supply to Entity 2 under section 9-5 of the GST Act.

Relevant facts and circumstances: Entity 1 is registered for GST from 1 July 20XX. Entity 1 has a verbal agreement to provide educational training and assessment services to Entity 2.

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

Reasons for decision: Summary: Section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides: A supply is GST-free if it is a supply of: a) an *education course; or b) administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course. (terms marked with asterisks (*) are defined in section 195-1 of the GST Act). You have entered into a verbal agreement to deliver educational training and assessment services to Entity 2 in relation to a supply Entity 2 is contracted under third-party agreements with 2 Registered Training Organisations (RTO) to provide to course participants. You are not supplying an education course but rather supplying Entity 2 with training and assessment services, this supply is not a GST-free education course. It will be a taxable supply and subject to GST if all the relevant requirements of section 9-5 of the GST Act are met. In this case, you are making a supply to Entity 2 and are receiving consideration for that that supply, the supply is made in the course of your enterprise that you carry on and is connected with Australia as the supply of the services is made through your enterprise carried on in Australia and you are registered for GST. Furthermore, the supply is not an input taxed supply nor any other GST-free supply under the GST Act. Therefore, as all the requirements in section 9-5 of the GST Act are met, your supplies of training and assessment services to Entity 2 are taxable supplies and will be subject to GST.