Private ruling: GST-free supply of special education courses to students with disabilities
Date of advice: 27 November 2018
Published: January 2019
Ruling period: Not applicable
Date scheme commenced: 27 November 2018

Ruling: Q1: Are the special education programs provided to children or students with disability, GST-free? | A1: Yes. The supply of special education programs designed specifically for children or students with disabilities will be GST-free. Please refer to the reasons for decision.

Relevant facts and circumstances: ● You provide several structured educational programs for children who are newborns to twelve years old. ● You are registered for goods and services tax (GST). ● You do not provide any day care or child care services. ● The educational programs provided by you are specifically marketed towards and targeted at children who suffer from (but are not are limited to) the following areas of concern: ● Lack of concentration ● Receptive and language difficulties ● Reading and writing ● Spelling difficulties ● Ease of frustration ● Lack of confidence ● Difficulty learning left from right and restlessness. ● Any child who is being placed into one of your educational programs is assessed upon entry through initial consultations and assessment. This allows you to allocate the child to the most appropriate program. ● You provide regular and comprehensive assessment and feedback throughout the program in the form of detailed report. ● The special education programs provided by you is available to all children and not limited to students with disabilities. ● You collaborates with qualified teachers both primary and secondary school, to demonstrate how you can assist children who are suffering from underlying problems such as (but not limited to): ● primitive reflex issues, ● undeveloped of postural reflexes, ● vestibular insecurity and sensory dysfunction. ● You also collaborate with other medical professionals such as Physiotherapists and Occupational Therapists to assist their clients who are suffering from the underlying problems. ● The educational programs offered by you are spilt into two broad categories, being the general activity program (i.e. group programs) and consulting programs (i.e. one-on-one programs). ● You have developed a syllabus for each program which details the sequence and scope of each lesson, topic and applicable milestone to be achieved by each child. ● All of the teachers employed by you are tertiary qualified, neuro-educationally trained teachers. ● Students are referred to you from various organisations such as Paediatricians, Occupational Therapists, Osteopaths & Chiropractors, Department of Family and Community Services etc.

Relevant legislative provisions: 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) | A New Tax System (Goods and Services Tax) Act 1999 – section 195-1

Reasons for decision: Summary: You make a taxable supply if the supply satisfies all of the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). A supply is not a taxable supply to the extent that it is GST-free or input taxed. The supply of special education programs by you will not be input taxed based on the facts provided. You will make supply of special education programs for consideration, you make the supply in the course or furtherance of your enterprise, the supply is connected with the indirect tax zone and you are registered for GST. Therefore, it should be determined whether the supply of special education program will be GST-free. A supply of education course is GST-free under section 38-85(a) of the GST Act. An education course is defined in section 195-1 of the GST Act to include, amongst other things, a special education course. Based on the facts provided, there are no other defined education courses that would apply to the supply of special education program by you. For GST purposes, ‘a special education course’ means a course of education that provides special programs designed specifically for children with disabilities or students of all ages with disabilities. Therefore, any of the special programs provided by you will be a special education course if: ● it is a course of education; ● it provides special programs; and ● the special programs are designed specifically for children with disabilities or students with disabilities (or both). Goods and Services Tax Ruling GSTR 2002/1: supplies that are GST-free special education courses provide guidance on when a course will meet the criteria for a GST-free special education course. All special education courses are GST-free, regardless of who supplies the course or where the supply is made. Whether a course is GST-free will depend on the attributes of the course and not on the status of the provider of the course. | Detailed Reasoning - Courses of education: To satisfy the criteria of an education course, GSTR 2002/1 provides that there must be a course or program involving systematic instruction training or schooling in the areas of: ● scholastic and academic pursuits ● vocational skills or ● personal development It can be delivered to a group of children or students or on an individual basis and may take the form of: ● a series of lessons or classes or ● a unit or module that forms part of a larger course. The course of education also needs to have the elements of interactive teaching. Paragraph 17 of GSTR 2002/1 provides factors that indicate interactive teaching include, but are not limited to: ● delivery of educational instruction through an instructor or teacher; ● ongoing support and guidance, for example, staff being available to answer questions; ● assessment of the child’s or student’s progress; ● monitoring or supervision; and ● provision of feedback concerning the child or student. The mere supply of things such as a self-paced software program without instruction, support, assessment, supervision or feedback, is not the supply of a course of education. Although these things may be used as learning tools, they do not satisfy the requirements of a course of education because they lack elements of interactive teaching. You will: ● specifically market and target at children who suffer from areas such as vocational skills and personal development. The areas of concern focused by you are such as lack of concentration, reading, writing, spelling difficulties, etc. ● provide regular and comprehensive assessment and feedback throughout the program. ● employ tertiary qualified and neuro-educationally trained teachers to provide the course of education. Therefore, we consider that the courses meet the criteria for courses of education. | Detailed Reasoning - Special program: Paragraph 19 of GSTR 2002/1 provides that a program is a special program if it is: ● designed specifically to meet the special needs of children or students with disabilities; ● designed specifically to reduce or prevent the impact of disabilities for children or students with disabilities; or ● not made available to people generally. Furthermore GST/ Ruling 2002/1 states at paragraph 25. “A special program needs to be designed specifically for children or students with disabilities. It is not necessary for people with disabilities to be the actual recipients of the program” In addition, paragraph 34 of GSTR 2002/1 provides guidance on the meaning of the term disability in relation to special education courses. Children or students with disabilities are those children or students who have a functional or structural impairment that causes them difficulty in executing activities or problems involving life situations. This would include, but is not limited to, conditions that may be diagnosed under the following broad headings: ● learning disabilities/specific learning difficulties (including dyslexia); ● autism spectrum disorder; ● physical disabilities; ● emotional disorders; ● language disorders; ● hearing impairments; ● visual impairments; ● intellectual disabilities. Based on the facts provided in this case: ● You have designed the educational programs specifically to meet the special needs of the children with disabilities. The programs are designed to address the diagnosed conditions of learning disabilities, physical disabilities, language disorders and intellectual disabilities. ● The special one-on-one education programs are only available to children with disabilities or learning delays while the special education group programs are available for all the children and their parents. ● The programs of assessing a child’s development needs and designing the courses for their specific disabilities and needs are considered to have met the criteria of courses specifically designed to reduce or prevent the impact of those disabilities. Therefore, the education courses provided by you which are specifically designed for children or students with disabilities will be GST-free. However, the education courses provided by you and its franchisees which are not specifically designed for children or students with disabilities will be subject to GST. Please note that where you supply a special education course to children or students with disabilities you may engage another person (for example, a consultant) to provide services to you. You may engage a consultant to design the contents of your course or to train your staff to deliver the course. However, the supply of the consultant’s services to you is not GST-free as a special education course.