Private ruling: GST and the supply of a training course.
Published: June 2014

Ruling: Q1: Will your supply of the training course be a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes

Relevant facts and circumstances: You: • are registered for GST • are not a: • higher education institution • body that is funded by a State or Territory authority on the basis that it is a provider of courses of a kind described in the A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (the Determination) • body corporate operating on a not for profit basis and • Registered Training Organisation (RTO) • applied to a state authority to be a provider of the training • have not been refused recognition or disqualified by a State or Territory authority as a provider of the courses of the kind described in subsection 5(2) of the Determination on the basis of failing to meet or maintain the standards required by that authority • plan to provide training for a specified group of employees and • will be providing your course which is not an accredited Vocational Education and Training (VET) program. You supplied two publications which described the training courses, outcomes and responsibilities of the participants. The courses are designed for the specified employees. However you have advised that they are not restricted to them. Others in the workforce and indeed members of the public can attend. You advertise your services by direct marketing and sometimes in the local newspaper. You have asked whether the training course you supply is an adult and community education course for GST purposes.

Relevant legislative provisions: Section 7-1 A New Tax System (Goods and Services Tax) Act 1999 | Section 9-5 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 A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision: Summary: Your supply of the training course does not satisfy the definition of an education course as defined in the GST Act. Accordingly, your supply of the course is not GST-free. Therefore your supply of the training course will be a taxable supply. | Detailed Reasoning - Detailed reasoning: GST is payable on taxable supplies. The supply of a training course will be a taxable supply if all the elements of section 9-5 of the GST Act are satisfied. Under section 9-5 of the GST Act you make a taxable supply if: • you make the supply for consideration • the supply is made in the course or furtherance of an enterprise that you carry on • the supply is connected with Australia, and • you are registered, or required to be registered, for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. The facts indicate that the supply will be made for consideration, the supply is made in the course or furtherance of your enterprise, the course will be conducted in Australia and you are registered for GST. In addition, there is no provision in the GST Act that would make your supply input taxed. Therefore, your supply of the training course will be a taxable supply, unless it is GST-free. | Detailed Reasoning - GST Free: Section 38-85 of the GST Act provides that a supply of an education course is GST free. An education course is defined in section 195-1 of the GST Act to include a number of different courses. These courses are also defined in the GST Act. Of the courses included in the definition, we consider tertiary course, professional or trade course and adult and community education (ACE) course are relevant for discussion in your situation. | Detailed Reasoning - Tertiary Course: A tertiary course is defined to be: • a course of study or instruction that is a tertiary course determined by the Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act • a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-government higher education institution or • any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act. The determination provides that an accredited VET program delivered by an RTO is a tertiary course. Your organisation is not an RTO and the training course you supply is not an accredited VET programme. Therefore, your course does not satisfy the definition of a tertiary course and therefore is not GST-free as a tertiary course. | Detailed Reasoning - Professional or Trade course: A professional or trade course means a course leading to a qualification that is an essential prerequisite: • for entry to a particular profession or trade in Australia; or • to commence the practice of (but not to maintain the practice of) a profession or trade in Australia. We consider the training course you provide is not a professional or trade course as the qualification is not an essential requisite for any profession or trade. | Detailed Reasoning - Adult and community education (ACE) course: 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 adult and community education 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 courses 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 of a kind described in the determination, or (b) is determined by the Education Minister to be an adult and community education course. | Detailed Reasoning - Are your courses likely to add to the employment related skills of people undertaking the course?: Goods and Services Tax Ruling GSTR 2000/27 Goods and services tax: adult and community education courses; meaning of 'likely to add to employment related skills' (GSTR 2000/27) discusses the meaning of 'likely to add to employment related skills'. You are providing specified training. Training of this type satisfies the criteria outlined in that ruling. Based on the information in your submission, it is accepted that the training courses provided by you are likely to add to the employment related skills of the people undertaking them. To satisfy the definition of an ACE course, the course must also meet the requirements specified in the Education Minister's Determination, that is, the A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000 (the Determination). | Detailed Reasoning - Does the course you provide satisfy paragraph (a) of the definition of an ACE course?: Under subsection 5(2) of the Determination, the Education Minister states that for paragraph (a) of the definition of an ACE course under section 195-1 of the GST Act, an adult and community education 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. In your case your course: a) does not fit any other education course defined in section 195-1 of the GST Act b) is unlikely to satisfy the tests under paragraph 5(2)(b) of the Determination in that although you have advised that general members of the public can attend it is not the type of course you would attend unless you were going to be a . Unless the course is genuinely promoted and marketed to adults in the general community, rather than through trade and business channels, it will not satisfy this criterion and c) is provided at the request of the employer of the employees that attend. Based on the information you have provided it is not accepted that your course satisfies the criteria outlined above because it is not generally for adults in the general community, but for employees and it is provided to employees at the request of their employer. Therefore, the training course you supply will not be of the kind determined to be an ACE course under section 5 of the Education Minister's Determination. Additionally, the note in subsection 5(2) of the Determination states that the course is to be provided by, or on behalf of, a body that: (a) is a higher institution, or (b) is recognised, by a State or Territory authority, as a provider of courses of the kind described in subsection (2) of the Determination, or (c) is funded by a State or Territory on the basis that it is a provider of courses of the kind described in subsection (2) of the Determination. On the facts: • you are not a higher institution • you are not a provider of a course that satisfies subsection 5(2) of the Determination. That is, an ACE course. Although WorkSafe must approve your course, paragraph (b) requires the authority to be the one that recognises ACE courses. The relevant authority in Victoria for the approval of ACE courses is the Adult, Community and Further Education Board (ACFE) and not WorkSafe. • you are not a body that is funded by a State or Territory authority on the basis that it is a provider of courses of a kind described in the Determination. Under the circumstances, the requirements specified in the note under section 5(2) of the Education Minister's Determination are also not satisfied, and your training course will not be considered an ACE course under paragraph (a) of the definition of an ACE course in the GST Act | Detailed Reasoning - Does the training course you provide satisfy paragraph (b) of the definition of an ACE course?: Under subsection 6(2) of the Determination, the Education Minister states that for paragraph (b) of the definition of an ACE course under section 195-1 of the GST Act, an adult and community education course must: (a) be a course of the kind described in subsection 5(2) of the Determination, and (b) be provided by, or on behalf of, a body that: (i) is a body corporate operating on a not-for-profit basis, and (ii) has not been refused recognition, or disqualified, by a State or Territory authority as a provider of courses of the kind described in subsection 5(2) of the Determination on the basis of failing to meet or maintain the standards required by that authority. On the facts, paragraph 6(2)(a) of the Determination is not satisfied as determined earlier. Further, you are not a body corporate operating on a not for profit basis. Therefore, the training course you supply will not be a course that is determined to be an ACE course under section 6 of the Education Minister's Determination. | Detailed Reasoning - Conclusion: The training course you supply does not satisfy the definition of an ACE course. The training course also does not satisfy as a tertiary course, a professional or trade course, or any of the other courses included in the definition of an education course under section 195-1 of the GST Act. That is, the training course you provide is not an education course for GST purposes and the GST-free provision under section 38-85 of the GST Act will not apply. This means, your supply of the training course will be a taxable supply under section 9-5 of the GST Act.