Private ruling: Goods and services tax (GST) and education courses
Published: July 2014

Ruling: Q1: Will GST be payable on your supply of the course? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You will supply a course, which was designed by a certain entity (X). The course will be of very short duration. The course was designed by entity X to improve the understanding of a particular Australian industry and assist in better marketing and sales of Australian produced goods. You will deliver the course to professionals wanting to improve their knowledge of the Australian industry and their industry related abilities. Participation in the course will result in a certificate of attendance and successful completion of an exam will result in a certificate being issued on behalf of X. The types of candidates will include retailers and other participants in the industry. It may also include employees in the industry. There is the possibility that enthusiasts may wish to enrol in this course. You believe that the course will add value, knowledge and skills to candidates working in the industry, to better understand, market and sell Australian produced goods (both in Australia and abroad). The course will appeal to professionals working in the industry along with businesses in the industry and their staff. The course was originally designed by a certain entity for export markets, to empower international buyers and professionals working with Australian produced goods in off-shore markets. A need was identified in Australia to offer the course domestically, which is why it is now offered in Australia. You are not an RTO. You were not established by a Commonwealth, State or Territory law as a higher education institution. You are not registered by the Tertiary Education Quality and Standards Agency as a higher education provider. You were not registered under State or Territory law relating to higher education. There is no legal requirement that people obtain the qualifications this course leads to in order to begin working in or commence the practice of a particular trade or profession. There is no professional or trade association that requires people to obtain the qualifications in order to begin working in or commence the practice of a particular profession or trade. You are not listed as a higher education provider in the Higher Education Support Act 2003 . You are not recognised by a State or Territory government education authority as a provider of adult and community education courses. You are not funded by a State or Territory government on the basis that you are a provider of adult and community education courses. You are not a non-profit body. The course will be available to adults in the general community. A person who wants to do the course need not be working in the industry. There are no entry criteria, for example, someone who is just an enthusiast could do the course. There will be wide scale promotion and advertising of the course. You will not be just promoting the course directly to people working in the industry. Course places will be available on a first come first served basis. The entire course will not be provided at the request of an employer to employees of the employer, although employers may purchase places in the course for their employees. The entire course will not be provided at the request of an organisation to members of that organisation. The course will not be provided to your employees or your members (shareholders). The course will not be provided by way of private tuition. You will be entitled to the course fees in your own right. The students will enrol with you and contract you to train them.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(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 9-40 | A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-85(a) | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Detailed Reasoning - Detailed reasoning: GST is payable by you on your taxable supplies. You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which 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. (*Denotes a term defined in section 195-1 of the GST Act) You meet the requirements of paragraphs 9-5(a) and 9-5(d) of the GST Act because: • you will supply the course for consideration; and • you will make the supplies in the course or furtherance of an enterprise that you carry on; and • the supplies will be connected with Australia; and • you are registered for GST. There are no provisions of the GST Act under which your supplies will be input taxed. Therefore, what remains to be determined is whether your supplies will be GST-free. In accordance with paragraph 38-85(a) of the GST Act, a supply of an 'education course' is a GST-free supply. 'Education course' is defined in section 195-1 of the GST Act. The definition lists various types of education courses. Of relevance to your case are: • tertiary courses • professional or trade courses, and • adult and community education courses | Detailed Reasoning - Tertiary course: Section 195-1 of the GST Act defines tertiary course as: (a) 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; or (aa) 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 (b) any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act. To be GST-free as a tertiary course under paragraph (a), a course must satisfy the Education Minister's determination under subsection 5D(1) of the Students Assistant Act 1973 ; the Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) (SAA Determination). The SAA Determination provides that an accredited vocational education and training program provided by an RTO or a higher education institution is a tertiary course. You are not an RTO. Further, you are not a higher education institution as defined in the SAA Determination because you are not an institution that was established by a law of the Commonwealth, a State or a Territory as a higher education institution and you are not registered or taken to be registered by TEQSA as a higher education provider. Therefore, your course is not a tertiary course under paragraph (a) of the definition of tertiary course in section 195-1 of the GST Act. Your course is not a tertiary course under paragraph (aa) of the definition of tertiary course in section 195-1 of the GST Act as it is not a Masters or Doctoral level course. Your course is not a tertiary course under paragraph (b) of the definition of tertiary course in section 195-1 of the GST Act. A determination has been made under paragraph (b) of the definition of tertiary course. However, it is not relevant to the supplies that you make. Hence, your course is not a tertiary course as it does not fall under the definition of a tertiary course in section 195-1 of the GST Act. Professional or trade course Section 195-1 of the GST Act defines 'professional or trade course'. It states: 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. The term 'essential prerequisite' is defined in section 195-1 of the GST Act, which states: essential prerequisite : a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed: (a) by or under an *industrial instrument; or (b) if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or (c) if neither paragraph (a) nor (b) applies but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association. Goods and Services Tax Ruling GSTR 2003/1 explains the meaning of 'professional or trade course' for the purposes of the GST Act. Paragraph 16 of GSTR 2003/1 provides that if a person cannot enter, or commence practising in, a profession or trade without a particular qualification, a course that leads to that qualification is a professional or trade course. Further, paragraph 48 of GSTR 2003/1 states: 48. A qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he or she can enter into, or commence the practice of, a particular profession or trade. This necessarily requires the imposition of penalties or sanctions if a person enters into, or commences the practice of, the profession or trade without the relevant qualification. Based on the information that you have provided, the qualifications one receives on completion of your course are not imposed as a requirement to enter or commence the practice of a particular profession or trade in Australia by a professional or trade association or a law. Hence, your course is not a professional or trade course. Adult and Community Education courses Section 195-1 of the GST Act defines adult and community education course as: 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. The Education Minister has made a determination under paragraph (a) of the definition of adult and community education course (A New Tax System (Goods and Services Tax) (Adult and Community Education Courses) Determination 2000) (ACE Determination) Subsection 5(1) of the ACE determination states: For paragraph (a) of the definition of adult and community education course in section 195-1 of the Act, a course of study or instruction of the kind mentioned in subsection (2) is determined to be an adult and community education course. Subsection 5(2) of the ACE Determination states: For subsection 5(1), the course of study or instruction must: (a) not be a course mentioned, in paragraph (a), (b), (c), (d), (e), (f), (h), (i), (j) or (k) of the definition of education course in section 195-1 of the Act; and (b) be a course that is available to adults in the general community; and (c) not be a course that is provided by, or at the request of an employer to the employees of that employer; and (d) not be a course that is provided by, or at the request of an organisation to the 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. Your course meets the requirements of subsection 5(2) of the ACE Determination. However, based on the information that you have provided, you are not a higher education institution, you are not recognised by a State or Territory authority as a provider of adult and community education courses and you are not funded by a State or Territory on the basis that you are a provider of adult and community education courses. As you are not one of the types of entities set out in paragraph (a) of the definition of adult and community education course in section 195-1 of the GST Act, your course is not an adult and community education course under paragraph (a). Subsection 6(1) of the ACE Determination states: For paragraph (b) of the definition of adult and community education course in section 195-1 of the Act, a course of study or instruction mentioned in subsection (2) is determined to be an adult and community education course Subsection 6(2) of the ACE Determination states: For subsection (1), the course of study or instruction must: (a) be a course of the kind described in subsection 5 (2); and (b) be provided by, or on behalf, of a body that: (i) is a body corporate that operates 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) on the basis of failing to meet or maintain the standards required by that authority. You are not a non-profit body. Therefore, your course is not an adult and community education course under paragraph (b) of the definition of adult and community education course in section 195-1 of the GST Act. As you are not one of the types of suppliers set out in paragraph (a) of the definition of adult and community education course or a non-profit body, your course is not an adult and community education course. There are no other provisions in the GST Act under which your supplies of the course are GST-free. Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied, your supplies of the course are taxable supplies. Hence, GST is payable on your supplies of the course. Your course does not meet the definition of education course in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Therefore, your supply of the course will not be GST-free.