Private ruling: Goods and services tax and tutoring services
Date of advice: 19 January 2021
Published: March 2021
Ruling period: 19 January 20XX to 18 January 20XX

Ruling: Q1: Are the tutoring services that you supply GST-free educational services for the purposes of Subdivision 38-C of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No.

Relevant facts and circumstances: You are registered for GST, with your main business activity being the provision of tutoring services. All tutoring is run through your business and provided by you. You tutor in subjects taught at primary and high school. Some of the students you work with have learning or other disabilities. You advised that you do not provide a "course" as such; rather, what you provide is a tailored and individualised service for each student. You work with students on a one to one basis to help them achieve their goals and learning outcomes as part of the school curriculum. For example, you help them to complete their schoolwork, assist with gaps in their learning, and support them with their short-term and long-term goals.

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

Reasons for decision: Summary: Section 38-85 of the GST Act states that a supply is GST-free if it is a supply of: (a) an *education course; or (b) administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course. (* an asterisk denotes a defined term in the GST Act) Section 195-1 of the GST Act provides that the term "education course" means: (a) a *pre-school course; or (b) a *primary course; or (c) a *secondary course; or (d) a *tertiary course; or (e) (Repealed by No 143 of 2007) (f) a *special education course; or (g) an *adult and community education course; or (h) an *English language course for overseas students; or (i) a *first aid or life saving course; or (j) a *professional or trade course; or (k) a *tertiary residential college course. (* an asterisk denotes a defined term in the GST Act) As stated in the facts, your tutoring services are not any of the types of courses listed in paragraphs (g) to (k) of the abovementioned definition of an "education course". It is therefore only necessary to consider the types of courses listed in paragraphs (a) to (d) and (f) of the abovementioned definition of an "education course" (each of which are defined in section 195-1 of the GST Act), in order to determine whether or not your supplies of tutoring services are GST-free. The definition of a "pre-school course" provides, amongst other things, that the course must be delivered by a "school" that is recognised as a pre-school under the law of the relevant State or Territory. As provided in the facts, you are not a "school" as defined in section 195-1 of the GST Act and therefore your tutoring services cannot be a "pre-school course" even if the other requirements of that term were to be met. The definition of a "primary course" provides, amongst other things, that the term means: either a course of study or instruction that is delivered by a "school" that is recognised as a primary school under the law of the relevant State or Territory; or any other course of study or instruction that the Student Assistance Minister has determined is a primary course for the purposes of the GST Act. As provided in the facts, you are not a "school" as defined in section 195-1 of the GST Act. Also, the Student Assistance Minister has not determined your tutoring services to be a "primary course" as defined in section 195-1 of the GST Act. As such, your tutoring services cannot be a "primary course" even if the other requirements of that term were to be met. The definition of a "secondary course" provides, amongst other things, that the term means: either a course of study or instruction that is a secondary course determined by the Student Assistance Minister under subsection 5D(1) of the SAA 1973 for the purposes of that Act; or any other course of study or instruction that the Student Assistance Minister has determined is a secondary course for the purposes of the GST Act. As provided in the facts, the Student Assistance Minister has not determined your tutoring services to be a "secondary course". As such, your tutoring services cannot be a "secondary course" even if the other requirements of that term were to be met. The definition of a "tertiary course" provides, amongst other things, that the term means: a course of study or instruction that is a tertiary course determined by the Student Assistance Minister under subsection 5D(1) of the SAA 1973 for the purposes of that Act; any other course of study or instruction that the Student Assistance Minister has determined is a tertiary course for the purposes of the GST Act; or 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". As provided in the facts, the Student Assistance Minister has not determined your tutoring services to be a "tertiary course". You are also neither a "higher education institution" as defined in section 195-1 of the GST Act or a "non-government higher education institution" as defined in section 195-1 of the GST Act. As such, your tutoring services cannot be a "tertiary course" even if the other requirements of that term were to be met. Goods and Services Tax Ruling GSTR 2000/30 Goods and services tax: supplies that are GST-free for pre-school, primary and secondary education courses (GSTR 2000/30) helps with working out which supplies of pre-school, primary and secondary education courses and which supplies related to such education courses, are GST-free under Subdivision 38-C of the GST Act. The ruling confirms our conclusions above that your tutoring services are not supplies of a "pre-school course", a "primary course" or a "secondary course'. Paragraph 18 of GSTR 2000/30 provides that a pre-school course must be delivered by a school. As stated in the facts, you are not a school. Paragraphs 20 and 22 of GSTR 2000/30 provide that a primary course is any course delivered by a school in accordance with the primary curriculum recognised by the education authority of the State or Territory, but regardless, the Education Minister can determine that a course is a primary course. As stated in the facts, you are not a school and the Education Minister has not determined your tutoring services to be a course that is a primary course. Paragraph 27 of GSTR 2000/30 provides that only courses covered by the Education Minister's determination under subsection 5D(1) of the SAA 1973 or under a separate determination, are a secondary course. As stated in the facts, the Education Minister has not determined your tutoring services to be a course that is a secondary course. The Explanatory Memorandum to the GST Act, which introduced the GST legislation into Parliament, outlines the purpose and object of the proposed legislation. Chapter 5 of the Explanatory Memorandum deals specifically with non-taxable supplies, including education. In relation to education, paragraph 5.59 of the Explanatory Memorandum states: 5.59 An education course does not include private tutoring, which is taxable. However, if an education course supplier engages a private tutor to deliver services, it would pay a GST-inclusive price to the tutor but would not pass on the GST cost to the student. Paragraphs 42 to 50 of GSTR 2000/30 explain the GST treatment of curriculum related activities and instruction, as follows: | Detailed Reasoning - Curriculum related activities and instruction: 42. The supply of curriculum related activities is part of the supply of an education course. Curriculum related activities include visits to you by organisations such as animal farms, theatre companies and science fairs. 43. The supply of curriculum related instruction is part of the supply of an education course. Curriculum related instruction includes instruction by external tutors or any third parties engaged by you to deliver part or all of the curriculum. It also includes remedial and advanced (extension) teaching provided by you for individual students. 44. As the supply of curriculum related activities and instruction is part of the supply of an education course, it is irrelevant whether the amount charged for the activity or instruction is included in the fee you charge for the course or whether it is charged separately. The amount charged must be paid to you, as the supplier of the education course. If the amount charged for the activities or instruction is paid by students to the provider of the activities or instruction, it is not GST-free to students as a supply of an education course. 45. However, if the provider is approved by the relevant state or territory body to conduct a pre-school, primary or secondary course, the supply made to students is the supply of an education course in its own right and is GST-free. 46. If the supply of the activity or instruction to you is made by an entity that is registered or required to be registered, the supply to you is a taxable supply and the amount you pay for the activities or instruction includes GST. You are entitled to input tax credits in respect of the GST paid on the acquisitions by you of activities or instruction. The subsequent supply that you make to students is GST-free. | Detailed Reasoning - Example Remedial Teaching: 47. Georgia is a Year 7 student and the school engages a private tutor to assist Georgia with her reading skills. The private tutor charges the school a GST inclusive fee. Engaging the services of private tutors to assist students with learning difficulties is a creditable acquisition and the school is entitled to an input tax credit for the GST paid. The subsequent supply by the school to Georgia is GST-free. | Detailed Reasoning - Example Drug Education: 48. An organisation offers drug education services to local organisations and community groups including schools. The organisation approaches Warranvale High to park their caravan in the school grounds and to give students the option of attending their seminar on drugs. 49. The organisation charges the students directly for attending their seminar. The charge is a GST-inclusive fee as the seminar is not conducted by the school. 50. Had the school contracted with the organisation directly, the fee charged to the school would still be taxable. If the school determined that the course was related to its curriculum, the fee charged to students would be GST-free and the school would be entitled to claim an input tax credit. In accordance with the advice provided in GSTR 2000/30, any fee that you charge for your supply of tutoring services will be subject to GST (where all the conditions of section 9-5 of the GST Act are met and your tutoring services are also not a "special education course" - refer below), regardless of whether you make the supply to the students or to a school, etc. The definition of a "special education course" in section 195-1 of the GST Act provides that the term means: a course of education that provides special programs designed specifically for children with disabilities or students with disabilities (or both). Goods and Services Tax Ruling GSTR 2002/1 Goods and Services tax: supplies that are GST-free as special education courses (GSTR 2002/1) explains the definition of the term. Paragraph 12 of GSTR 2002/1 provides that a course meets the requirements of the definition of the term "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). The expressions that make up the definition of the term "special education course" are not defined in the GST Act, so it is necessary to consider their ordinary meanings. Paragraphs 14 to 19, 22, and 35 to 39 of GSTR 2002/1 state as follows: | Detailed Reasoning - Course of education: 14. Taxation Ruling TR 98/9 states the ATO view on what is a 'course of education': 'In our view, a course of education is a course or program of study involving systematic instruction, training or schooling. 'Education' is to be given its ordinary meaning of 'acquisition of knowledge, skill etc.' (Macquarie Dictionary) and refers to a wide range of knowledge or skill, including sport. 15. In the context of the definition of a 'special education course' in section 195-1, a course of education should also be given a wide meaning to include a course or program of study involving systematic instruction, training or schooling in areas of: • scholastic and academic pursuits; • vocational skills; or • personal development. 16. The systematic instruction, training or schooling may be delivered to a group of children or students or to an individual child or student and may take the form of: • a series of lessons or classes; or • a unit or module that forms part of a larger course. 17. To be a course of education, the systematic instruction, training or schooling also needs to have elements of interactive teaching. 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. 18. 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. | Detailed Reasoning - Special program: 19. 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. | Detailed Reasoning - Designed specifically for children or students with disabilities: 22. You need to consider the whole of the circumstances of the creation and delivery of a program to decide whether it is designed specifically for children or students with disabilities. Relevant matters include: • evidence of an intention to design the program for children or students with disabilities; • the character of the program that is provided; • the intended recipients of the program; and • any relevant obligations you or others have in providing the program. | Detailed Reasoning - Programs that are not special education courses: Programs that are not a course of education and do not form part of a course of education 35. A special education course is a course of education that provides special programs. That is, the special program must, in itself, be a course of education or form part of a course of education. The program is not a special education course if it: • does not contain elements of a course of education as described in paragraphs 14 to 17; and • does not form part of a course of education. 36. For example, a program is not a course of education if it only provides: • treatment for a medical or physical condition; or • personal or therapeutic care, support or assistance. 37. However, if such a program is combined with a course of education that is designed specifically for children or students with disabilities, then it forms part of a special education course. Programs that are not 'designed specifically' for children or students with disabilities 38. Children or students with disabilities may participate in programs that are not designed specifically for people with disabilities. For example, they may participate in activities that are designed to help students improve their grades, by way of: • private tutoring; • coaching; or • extension learning programs. 39. If these courses are not designed specifically for children or students with disabilities, they are not special education courses, regardless of whether children or students with disabilities are the recipients. However, if these programs have characteristics that demonstrate that they are special programs designed specifically for children or students with disabilities they will satisfy the definition of a special education course. GSTR 2002/1 (at paragraphs 48 to 50) provides several examples of programs / courses which the ATO considers meet the first requirement of a "special education course" (i.e. the requirement that it be a course of education ). The abovementioned examples include the following common elements: the design of programs / courses of study and the systematic delivery to participants of the training / lessons / sessions / classes by instructors / teachers; the provision of ongoing support / guidance / assistance and feedback to participants; the assessment of participants to determine if they have acquired the relevant learnings; the monitoring / supervision of participants; and the use of interactive teaching methods. GSTR 2002/1 also provides examples of programs that are not special education courses. The most relevant of these examples is the following: Example 7 54. An academy of education designs programs for children and students who are behind in their studies. The academy also designs courses for students who want to excel in their studies to gain scholarships or placements at selective schools. 55. Gemma is dyslectic, and her parents have enrolled her at the academy. One of the academy's tutors works with Gemma, through a coaching program. This program is not modified in any way to suit Gemma. Although the program is delivered to a child or student with disabilities, it does not satisfy the definition of a special education course because it has not been designed specifically for children or students with disabilities. We do not consider your tutoring services to be a "special education course". You are not providing a series of lessons or classes; nor are you providing a unit or module that forms part of a larger course. You advised that your tutoring services are not a "course" as such. Further, while some of the students that you tutor have disabilities, no evidence has been provided by you to support your contentions that the tutoring is specifically designed for students with disabilities. In summary, the tutoring services that you provide are not GST-free supplies for the purposes of Subdivision 38-C of the GST Act as they do not satisfy the definition of an "education course".