Private ruling: Whether the supply of specific training elements is a GST-free supply
Date of advice: 17 April 2020
Published: June 2020

Ruling: Q1: Is your supply of specific training elements a GST-free supply of education course? | A1: Yes, your supply of specific training elements are a GST-free supply of an education course(s) under section 38-85(a) of the A New Tax System (Goods and Services Tax) Act 1999 ('GST Act').

Relevant facts and circumstances: You are registered for goods and services tax (GST) You asked if specific elements of training that you intend to supply are GST-free You are a registered RTO and CRICOS provider You provided documents including a draft agreement. The agreement included the term of the training and what was included in the costs relating to the training arrangement.

Relevant legislative provisions: Subsection 38-85(a) of the GST Act | Section 195-1 of the GST Act

Reasons for decision: Detailed Reasoning - Legislation:: Subsection 38-85(a) of the GST Act provides a supply of an education course is GST-free, and Section 195-1 of the GST Act further defines · an education course to include a professional or trade course · a professional or trade course means a course leading to a qualification that is an essential prerequisite: (a) for entry to a particular profession or trade in Australia, or (b) to commence the practice of (but not to maintain the practice of) a profession or trade in Australia. · Essential prerequisite: a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed: (a) by or under an *industrial instrument; or (b) if there is no industrial instrument for that profession or trade but there is a professional or trade associated that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that associate; or (c) if neither paragraph (a) nor (b) applies but there is a professional or trade associate in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association. [Note items with an * asterisk are further defined in section 195-1 of the GST Act] | Detailed Reasoning - ATO View:: Our Goods and Services Tax Ruling GSTR 2003/1: Goods and services tax: supplies that are GST-free as a professional or trade course ('GSTR 2003/1') explains our view of the meaning 'professional or trade course' and includes (emphasis added): 29. A program of subjects that you supply as one course may be a mixed supply. The supply is a mixed supply if it comprises subjects that are separately identifiable as a professional or trade course, and other subjects or things that are taxable . You will need to apportion the consideration for a mixed supply between the taxable and non-taxable parts to find the consideration for the taxable part. ... 43.... In the context of the definition of a professional or trade course in section 195-1, a qualification is an attribute or quality that is acquired after undertaking a course. It is evidenced by some document that indicates successful completion of the course. The document would normally be accepted by a Commonwealth, State or Territory authority, or a professional or trade association,... 44. A relevant authority or professional or trade association may issue a licence or a certificate that qualifies a person to do certain things. For example, a licence to drive a particular class of heavy road vehicle, or a practising certificate. Where this is the case, the certificate or licence is a qualification for the purposes of the section 195-1 definition of a professional or trade course. 45. Documents that are qualifications or that provide evidence of a qualification include: · ... · a licence;... | Detailed Reasoning - Is the qualification an essential prerequisite?: 46. Your course will only be a professional or trade course if it leads to a qualification that is an essential prerequisite for entry to, or to commence the practice of, a particular profession or trade. 47.... 48. A qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he or she can enter into, or commence the practice of, a particular profession or trade. This necessarily requires the imposition of penalties or sanctions if a person enters into, or commences the practice of, the profession or trade without the relevant qualification. | Detailed Reasoning - Applying the law and ATO view to your circumstances: Based on the above, we are satisfied the specific training elements you supply will be a GST-free supply of an education course(s) under subsection 38-85(a) of the GST Act, as we are satisfied these specific training elements are an essential prerequisite that leads to professional qualification.