Private ruling: Education
Date of advice: 25 September 2017
Published: February 2018

Ruling: Q1: Is the supply of professional development courses delivered by Entity A GST-free supplies of education courses under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, the professional development courses delivered by Entity A are not GST-free supplies of education courses under section 38-85 of the GST Act.

Relevant facts and circumstances: Entity A is registered for goods and services tax (GST). Entity A provides professional development courses to upskill and further develop employment related skills of its participants. These courses are aimed at adding to the employment related skills of its participants. The course content is based on certain parts of accredited specific programs, where individuals in the workplace are required to upskill and refresh their skills and knowledge. The courses fill the gap between completed formal qualifications/studies and the changing workplace requirements. Entity A also offers courses in computer skills, job searching and literacy to assist individuals in entering the workforce. The courses are all interactive and delivered face to face. A certificate of completion is issued to all participants. Participants are supported after the course by participating in closed online group forums, led by the facilitator to encourage implementations of the learnings in the workplace and ongoing interactions with others within their industry. Entity A is not recognised or funded by the relevant State or Territory authority as a provider of adult and community courses. Entity A is not a body corporate operating on a not-for-profit basis. The courses provided by Entity A are available to adults in the general community. The courses provided by Entity A are not provided by or at the request of an employer to only employees of that employer. The courses provided by Entity A are not provided at the request of an organisation to members of that organisation only. The courses provided by Entity A are not provided by way of private tuition to an individual. The courses provided by Entity A are marketed through its website, email marketing, social media and brochures. There are no prerequisites for a particular qualification, or a particular amount of experience required before a person can undertake the courses provided by Entity A. The courses do not lead to a qualification that is an essential prerequisite for entry or commencement of a particular profession or trade in Australia. Entity A is not a higher education institution as defined in section 16-1 of the Higher Education Support Act 2003 .

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

Reasons for decision: Summary: Section 38-85 of the GST Act states that a supply is GST-free if it is a supply of an education course or administrative services directly related to the supply of such a course but only if they are supplied by the supplier of the course. The term 'education course' is defined in section 195-1 of the GST Act to include: ● a *pre-school course; or ● a *primary course; or ● a *secondary course; or ● a *tertiary course; or ● a *special education course; or ● an *adult or community course; or ● an *English language course for overseas students; or ● a *first aid or life saving course; or ● a *professional or trade course; or ● a *tertiary residential college course. All the words denoted by asterisks are defined in section 195-1 of the GST Act. Based on the information provided, Entity A is not providing a pre-school course, a primary course, a secondary course, a tertiary course, a special education course, an English language course for overseas students, a first aid or life saving course or a tertiary residential college course. | Detailed Reasoning - Professional or trade course: The GST Act defines a professional or trade course as follows: 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. Entity A has advised that its courses do not lead to a qualification that is an essential prerequisite for entry or commencement of a particular profession or trade in Australia. Therefore Entity A does not provide professional or trade courses as defined by the GST Act. | Detailed Reasoning - Adult or community course (ACE course): To be GST-free as an ACE course, a course must be: (i) likely to add to the employment related skills of people undertaking the course; and (ii) of a kind determined by the Education Minister to be an adult and community education course; and (iii) provided by, or on behalf of, a body that is: ● a higher education institution; or ● recognised or funded by the relevant State or Territory authority as a provider of ACE courses; or ● a body corporate operating on a not-for-profit basis that has not been refused recognition, or disqualified, by a State or Territory authority as a provider of ACE courses . All three of the above requirements must be present for the course to be a GST-free ACE course. First requirement Goods and Services Tax Ruling GSTR 2000/27 discusses the meaning of 'likely to add to employment related skills'. Paragraph 15 of the GSTR 2000/27 states: The test as to whether an adult and community education course is likely to add to the employment related skills of people undertaking the course is an objective test and not dependent on the subjective intention of the providers of the course or the recipients . However we consider a course satisfies the test if the course meets the following requirements: (a) It is directed at people who want to add to their employment related skills; and (i) The objectives of the course specify the employment related skills that participants will acquire in undertaking the course; and (ii) The means of imparting the skills to the participants are clearly identified prior to the commencement of the course; and (iii) There is a reasonable expectation that the skills being developed will be used in the course of being an employee, or working in a business, occupation, profession or trade, rather than for recreational, hobby, artistic or cultural endeavours. Based on the information that Entity A has provided, it is accepted that the training courses provided by Entity A is likely to add to the employment related skills of the people undertaking them. Second requirement To satisfy the definition of an ACE course, the course must also meet the requirements of the Education Minister's Determination A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (ACE Determination). At paragraph 5(2) of the ACE Determination, the Education Minister provides that an adult and community education course must: (a) not be any other education course defined in section 195-1 of the Act; and (b) be available to adults in the general community; and (c) not be provided by or at the request of an employer to employees of that employer; and (d) not be provided by or at the request of an organisation to members of that organisation, except an organisation for which membership is open to adults in the general community; and (e) not be a course that is provided by way of private tuition to an individual. Based on the information provided, (a) The training courses provided is not of a kind mentioned in any other paragraph of the definition of education courses in section 195-1 of the GST Act. (b) The courses are provided to all members of the general community. There are no prerequisites which anyone must meet to enrol in the courses. (c) The courses are not provided upon employers’ request for their employees. (d) The courses are not provided by or at the request of an organisation to members of that organisation. (e) The courses are not provided by way of private tuition to an individual. Therefore, the training courses provided by Entity A meet part of the requirement of the Education Minister’s Determination to be an ACE course. The rest of the requirements of the Education Minister’s Determination are set out in the “ Third requirement ” below. Third requirement Entity A is not a higher education institution. Entity A is not recognised or funded by the relevant State or Territory authority as a provider of ACE courses nor is Entity A a body corporate operating on a not-for-profit basis. Given the above, Entity A does not meet the third requirement of a GST-free ACE course and is therefore not considered to be providing GST-free education courses for the purposes of section 38-85 of the GST Act.