Private ruling: GST and supply of courses
Date of advice: 7 October 2015
Published: October 2015

Ruling: Q1: Are you making a GST-free supply of an adult and community education (ACE) course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you are a registered training organisation (RTO) and supply courses? | A1: When you are an RTO and supply courses, the supply of these courses is GST-free ACE courses under section 38-85 of the GST Act to the extent that the courses are not provided to individuals at the request of employers, organisation or by way of private tuition to the individual. | Q2: Are you making a GST-free supply of an ACE course under section 38-85 of the GST Act when you are not an RTO and supply courses? | A2: When you are not an RTO and supply courses, the supply of these courses is GST-free ACE courses under section 38-85 of the GST Act to the extent that the courses are not provided to individuals at the request of employers, organisation or by way of private tuition to the individual.

Relevant facts and circumstances: You are registered for the goods and services tax (GST). You deliver training and assessment courses and issue licence as authorised and on behalf of the State Government. The State Government has granted you a Training Organisation Authority. You are listed within the State's scheme of ACE Course and do not receive any funding from the State for the supply of your courses. The courses are delivered individually and can be combined as well. A remote learning option is also available for students who cannot attend the course at a training facility. The courses after successful completion lead to the granting of a Certificate of Competency. The certificate is presented to the State Government prior to the issue of a licence. The certificate of attainment that is issued after successful completion is a Government document and is a pre-requisite for the issue of the licence. It is not compulsory for an RTO to sign off on a certificate of attainment or completion with the licence for the State Government. The units of competency are specified and reviewed by the State Government. The subjects are competency units within the present scope of registration of your RTO and are identical to a VET program. The training is offered by Licensed Agents of your organisation who are listed by the State Government as approved Licence Training Providers. The objective of these courses is to ultimately provide a safer environment and reduce the fatality rate. The course is available to adults in the community. A wide variety of persons attend the course, such as high school students as part of their education, clubs and others as a pre-requisite for a certain employment position. The students will achieve a satisfactory level of competency to progress their career and secure employment as required. The course is not designed for a specific industry but is called up by many industries to suit those needs. On a reasonably regular basis you have request from employers, organisation, clubs and so on for the provision of your course. Private tuition is rare but can be for persons when time is restrained. Only on odd occasion you have persons doing refresher courses.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-85 | A New Tax System (Goods and Services Tax) Act 1999 Section 195-1

Reasons for decision: Detailed Reasoning - Questions 1 and 2: A supply of an education course is GST-free under section 38-85 of the GST Act. An 'education course' is defined in section 195-1 of the GST Act and includes ACE courses. An 'ACE course' is defined in section 195-1 of the GST Act to mean a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and: a) is of a kind determined by the Education Minister to be an ACE course and is provided by, or on behalf of, a body: i. that is a higher education institution; or ii. that is recognised, by a State or Territory authority, as a provider of course of a kind described in the determination; or iii. that is funded by a State or Territory on the basis that it is a provider of courses or a kind described in the determination; or b) is determined by the Education Minister to be an Ace course. Accordingly, to be GST- free as an ACE course, the following three requirements must be satisfied: i. The course must be a course of study or instruction that is likely to add to the employment related skills of people undertaking the course; and ii. The course must be of a kind determined by the Education Minister to be an ACE course; and iii. The course must be provided by a body that is either a higher education institution, or by a body that is recognised or funded by a State or Territory authority to conduct ACE courses as described in the Education Minister's determination. | Detailed Reasoning - First requirement: The Goods and Services Tax Ruling GSTR 2000/27, discusses the meaning of 'likely to add to employment related skills'. Paragraph 15 of GSTR 2000/27 provides that the test as to whether an ACE course is likely to add to the employment related skills of people undertaking the course is an objective test and is not dependant on the subjective intentions of the course provider nor of the participants. Paragraph 15 of GSTR 2000/27 states that a course is likely to add to the employment related skills of people undertaking it, if the course meets all of the following requirements: a) the course is directed at people who want to add to their employment related skills; and b) the objectives of the course specify the employment related skills the participants will acquire; and c) the means of imparting the skills are clearly identified prior to the commencement of the course; and d) there is a reasonable expectation that the skills developed will be used in the course of being an employee or working in a business (rather than for recreational, hobby, artistic or cultural endeavours). Providing all of the above requirements are satisfied, a course is likely to add to the employment related skills of people undertaking it. If an objective assessment of the course fails to satisfy any of the above requirements, then the course is not likely to add to the employment related skills of people undertaking it. A wide variety of person attend the course, such as high school students as part of their education, clubs and others as a pre-requisite for a certain employment position. The students will achieve a satisfactory level of competency to progress their career and secure employment as required. Based on this information it is accepted that the courses you provide are likely to add to the employment related skills for the people undertaking them. | Detailed Reasoning - Second requirement: To satisfy the definition of an ACE course the course must also be of a kind determined by the Education Minister. A New Tax System (Goods and Services Tax)(Adult and Community Education Courses) Determination 2000 (the Education Minister's ACE Determination) provides the requirements of the kinds of courses determined to be ACE courses. At paragraph 5(2) of the Education Minister's ACE Determination, the Education Minister states that an ACE course must: a) not be any other education course defined in section 195-1 of the GST 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. The course is available to adults in the community. On a reasonably regular basis you have request from employers, organisations, clubs and so on to provide the courses to their members or employees. Private tuition is rare but can be for persons when time is restrained. In this circumstance, the courses are excluded from the definition of an ACE course in the Education Minister's ACE Determination. However, where at any time all the criteria in paragraph 5(2) of the Education Minister's ACE Determination are satisfied, then the second requirement is met. | Detailed Reasoning - Third requirement: Finally, the course must be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis. The State Government has granted you a 'Training Organisation Authority' and you advised you are recently listed within the State's scheme of ACE. It is therefore accepted that you satisfy the third requirement where you satisfy the second requirement as, in this instance you are recognised by the State Government to be a provider of ACE course. | Summary: Whether you are a registered RTO or not, your supply of courses is GST-free ACE courses under section 38-85 to the extent that the courses are not provided at the request of employers, organisation or by way of private tuition to the individual.