Private ruling: Goods and services tax (GST) and education courses
Published: September 2013

Ruling: Q1: Is GST payable by you on the supply you make in return for the payment from the other education institution? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You employ a qualified trainer and assessor, the individual. You stated that the individual provides nationally accredited courses to the other education institution. The other education institution manages the student registrations and course scheduling. The other education institution invoices the students for the course. The students pay the other education institution for the course. The other education institution sets the course fees. You have an agreement with the other education institution under which you agree to present the courses. You stated that you deliver the courses on behalf of the other education institution. You invoice the other education institution. The amount you receive from the other education institution is not dependent on the number of students doing the course. The courses are nationally accredited courses that provide training in the operation of cranes, forklifts, elevated work platforms and training in working as a dogman and basic rigger. The courses lead to a nationally accredited qualification - a certain qualification, which is a high risk work licence. This licence is a legal requirement to begin working in the high risk areas - crane operator, forklift operator, elevated work platform operator, dogman and rigger. It is the individual's responsibility to perform the assessment of the students and sign off on their qualification - a certain qualification. The individual signs the qualification, but the qualification is provided on the other education institution's letterhead.

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: Summary: You are not supplying education courses. You are instead supplying teaching services. GST is payable by you on your supplies of the teaching services because the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are met. | 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) GST-free education courses In accordance with paragraph 38-85(a) of the GST Act, a supply of an education course as defined in section 195-1 of the GST Act is GST-free. Section 195-1 of the GST Act defines education course to mean various types of courses. Section 195-1 of the GST Act provides that education course includes a professional or trade course as defined in section 195-1 of the GST Act. Section 195-1 of the GST Act defines professional or trade course as 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. In accordance with section 195-1 of the GST Act, essential prerequisite includes a qualification that is imposed by or under an industrial instrument. In accordance with section 195-1 of the GST Act, 'industrial instrument' includes an Australian law. Paragraphs 165 to 170 of Goods and Services Tax Ruling GSTR 2006/9 provide an example that is relevant to your case. They state: Example 6: teaching services 165. A, a supplier of teaching services, enters into a contract with B, a course provider, to provide teaching services to B's students. 166. B conducts professional or trade courses that are GST-free under section 38-85. Students enrol with, and pay fees directly to, B. When a student completes the course, B is authorised by the relevant State or Territory authority to conduct a test. If a student passes the test, B facilitates the issuing of the qualification/licence by the relevant State or Territory authority. 167. A has no contractual relationship with the students. 168. A makes a supply of the teaching services to B and A provides this supply to the students. A's supply is not a GST-free supply of a professional or trade course. A diagram was provided. 169. However, B does make a GST-free supply of a professional or trade course to the students. The students enter into contractual arrangements with B for the supply of the professional or trade course. B makes a supply of the course to the students. It does not matter whether B's employees do the actual teaching or B subcontracts the teaching to another entity (in this case A). 170. Based upon these contractual arrangements, the students are the recipients of the supply of the professional or trade course made by B, and B is the recipient of the supply of teaching services made by A. You provided the following information about the contractual arrangements in your case: · the other education institution manages the student registrations · the other education institution manages the course scheduling · the other education institution invoices the students for the course · the students pay the other education institution for the course · the other education institution sets the course fees · the other education institution is responsible for issuing the qualification · you have an agreement with the other education institution under which you agree to present the course · you stated that you deliver the courses on behalf of the other education institution · you invoice the other education institution, and · the amount you receive from the other education institution is not dependent on the number of students doing the course. This information indicates that: · the students contract the other education institution to supply the courses · the students do not contract you to supply the courses, and · the other education institution contracts you to supply teaching services. Therefore, you are not supplying an education course, but are instead supplying teaching services to the other education institution. You meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because: · you supply teaching services for consideration · you make these supplies in the course or furtherance of an enterprise that you carry on · these supplies are connected with Australia, and · you are registered for GST. There are no provisions of the GST Act under which your supplies of the teaching services to the other education institution are GST-free or input taxed. As all of the requirements of section 9-5 of the GST Act are met, you make taxable supplies to the other education institution. Hence, GST is payable by you on your supplies of these services.