Private ruling: GST and education course
Date of advice: 20 December 2018
Published: April 2019
Ruling period: Quarter ending 31 December 20XX to 31 December 20XX

Ruling: Q1: Are you making a GST-free supply of an education course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 , as a professional or trade course when you deliver your course titled “X”? | A1: No, you are not making a GST-free supply of an education course

Relevant facts and circumstances: You are a sole trader and are registered for goods and services tax. You provide an education course called “X” (the course). You are not a Registered Training Organisation. The course is not delivered through a higher education institution. It is delivered by you over two days at various training facilities or function centres. You do not hire instructors to deliver the course. The course is not divided into separate subjects but is a 15 hour course delivered over two days in a class room setting. A single fee is charged to register over the two days for the course. The course is not provided through a self-paced software program. You provide ongoing support and guidance for your students by providing 12 weeks of post course automated research papers and other relevant information. You also have private Facebook groups that past students can join. During the course, you provide one-on-one assistance to your students as the techniques are very specific and require face to face interactions. On completion of the course, you issue the students with a certificate showing the course name, the hours completed and the number of professional development points the students received. The certificate you issue is recognised by, and the professional development points are in relation to, various professional associations. At the end of the course, the students are not required to take an assessment of competency or satisfactory completion of the course. As such you do not access a student’s progress during the course nor do you make an assessment of competency or satisfactory completion of the course. However, students are not issued the certificate of completion if they do not attend the full course. Students of the course are qualified in their individual professions and by undertaking the course, will acquire a specialization. With the completion of the course, the students are able to add the subject of the course to their skill sets.

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

Reasons for decision: Summary: In this ruling, please note: ● All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless stated otherwise. ● All terms marked by an asterisk are a defined term in the GST Act unless stated otherwise. You must pay the GST payable on any taxable supply that you make. Section 9-5 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. In your case, you will make a supply of the course in Australia for consideration in the course of your enterprise and you are registered for GST. Therefore you satisfy paragraphs 9-5(a), (b), (c) and (d). Further, the input tax provisions do not apply in your circumstances. Therefore, the relevant issue to be determined here is whether the GST-free provisions apply in your circumstances, specifically whether there is a GST-free supply of an education course. | Detailed Reasoning - Education course: An ‘education course’ is GST-free under section 38-85. The term ‘education course’ is defined in section 195-1 as follows: education course means: (a) a *pre-school course; or (b) a *primary course; or (c) a *secondary course; or (d) a *tertiary course; or (e) (Repealed) (f) a *special education course; or (g) an *adult and community education course; or (h) an *English language course for overseas students; or (i) a *first aid or life saving course; or (j) a *professional or trade course; or (k) a *tertiary residential college course. In your case, the only ‘education course’ of relevance to your circumstances is a ‘professional or trade’ course. | Detailed Reasoning - Professional or trade course: The term ‘professional or trade course’ is defined in section 195-1 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. Goods and Services Tax ruling GSTR 2003/1 Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1) provides guidance on the meaning of ‘professional or trade course’. Paragraph 22 of GSTR 2003/1 provides general indicators of what constitutes a course and includes (but is not limited to) the following: ● delivery of educational instruction through an instructor or teacher; ● ongoing support and guidance, for example, being available to answer questions; ● assessment of the individual's progress; ● monitoring or supervision; ● provision of feedback concerning the individual; and ● assessment of competency or satisfactory completion at the end of the program of instruction. Further, paragraph 83 of GSTR 2003/1 provides that the necessary profession or trade needs to be identified. It states: 83. For a course to be a professional or trade course, it must lead to a qualification that is an essential prerequisite. It is therefore necessary, for the purposes of the section 195-1 definition of a 'professional or trade course', to identify the profession or trade. In your case, you have advised that the students of the course are already qualified in their professions and who, by undertaking the course, are seeking to acquire a specialization. Paragraphs 92 to 97 of GSTR 2003/1 considers if specialisation can be considered to be a separate profession or trade. In particular paragraphs 92 to 94 of GSTR 2003/1 state: 92. For the purposes of the definition of a 'professional or trade course' in section 195-1, a distinction must be drawn between a course that provides a qualification to enter into a profession or trade and one that is undertaken to acquire specialist or additional skills within that profession or trade. 93. A course leading to a qualification that merely enhances a recipient's proficiency to undertake a wider range of activities in his or her profession or trade, is not a professional or trade course. 94. For a specialisation to be characterised as a separate profession or trade, its attributes must be more than merely a set of additional skills or endorsements that enable a person to undertake different tasks within their profession or trade. Whether a specialisation within a profession or trade in a broader sense is a separate profession or trade will require a practical judgment having regard to a range of factors in each case, including whether: ● the specialisation services a different client base; ● the tasks performed are in a different field of learning or science; ● the specialisation is covered by an industrial instrument that specifically deals with that specialisation; ● the specialisation has its own distinct professional or trade association that determines the educational or qualification requirements for entry into that specialisation; and ● any additional study of significant duration is required in order to perform the tasks in that specialisation. In your case, the course does not provide a qualification to enter into the identified profession as your students are already qualified in this profession. The course is undertaken to acquire specialist or additional skills within the profession. Paragraph 93 of GSTR 2003/1 provides that a course leading to a qualification that merely enhances a recipient's proficiency to undertake a wider range of activities in his or her profession or trade, is not a professional or trade course. Further paragraph 94 of GSTR 2003/1 provides that for a specialisation to be characterised as a separate profession, its attributes must be more than merely a set of additional skills or endorsements that enable a person to undertake different tasks within their profession. Whether a specialisation is within a profession or is a separate profession or trade will require practical judgment having regard to a range of factors including those in paragraph 94 of GSTR 2003/1 as listed above. Based on the facts provided, the course does not exhibit any of the characteristics as listed in the factors outlined in paragraph 94 of GSTR 2003/1 and as such would not be considered to be a separate profession. It follows that the course you supply does not satisfy the definition of professional or trade course and is not a GST-free supply of an education course. As the course meets all the other requirements of section 9-5 of the GST Act, it will be subject to GST as all the requirements of a taxable supply are satisfied.