Private ruling: GST and professional or trade courses
Date of advice: 20 August 2018
Published: October 2018

Ruling: Q1: Is your supply of training courses to fly drones commercially as required by the Civil Aviation Safety Authority (CASA) for the issue of a Remote Pilot Licence (RePL), a supply of GST-free education courses under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, for the period that you are certified as an approved CASA training organisation, your supply of training courses to fly drone commercially, as required by CASA for the issue of a RePL, will be GST-free education courses under section 38-85 of the GST Act.

Relevant facts and circumstances: You are registered for GST. You provide the following training courses (relevant training courses) in relation to flying drones commercially: ● RePL Theory and Operational Training ● Aviation Radio Operators Certificate (AROC) if the individual wishes to operate an AIR Band Radio while flying the drone, and ● RePL Type Conversion which an existing manned aircraft pilot can undertake to add drones to their licence. The Civil Aviation Safety Regulations provide that an individual needs to have a RePL to fly a Remotely Piloted Aircraft (RPA), known as a drone, for commercial purposes. CASA is the statutory authority responsible for issuing the RePLs. You advised that you are an approved CASA training organisation and the curriculum of your training courses had been approved by CASA. To confirm this approval you provided us with a RPA Operator’s Certificate (ReOC) issued to you by CASA. Under that ReOC you are approved to train in Multirotor below 25 kgs and fixed wing below 25 kgs. You are also authorised to provide AROCs. Upon completion of your training courses, your students will receive a certificate of completion from you. You will then submit a recommendation to CASA that your students be issued with a RePL to operate commercially. CASA will then issue the licence, including an AROC, as recommended with no further testing required. A search in the CASA website showed the following relevant information to this case: ● CASA is an independent statutory authority established on 6 July 1995 with its primary function to conduct the safety regulation of civil air operations in Australia and the operation of Australian aircraft overseas. ● You are listed as one of the approved training organisations certified by CASA to deliver Operational training but there were no details given about the duration of your approval. ● CASA Regulation Reform: Flying drones in Australia – where it advised that new licensing and certification by CASA have been introduced for operators of remote piloted aircraft outside of the excluded category. ● CASA Fact Sheet: How to apply for a Remote Pilot Licence (RePL) – Effective 1 June 2017 – This fact sheet explained that an RePL is required for flying a remote piloted aircraft for commercial work and the other relevant requirements. ● CASA Regulation Reform: The RPA operator’s certificate for drones – where it advised a ReOC is valid for an initial 12 months which requires the holder to renew after one year of operation. Upon renewal, the ReOC is then valid for three years. ● CASA Advisory Circular 101-01 (AC 101-01): Remotely piloted aircraft systems – licensing and operations.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-85 | A New Tax System (Goods and Services Tax) Act 1999 Division 142 | A New Tax System (Goods and Services Tax) Act 1999 s ection 195-1 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: Division 38 of the GST Act outlines supplies that are GST-free. Under paragraph 38-85(a) of the GST Act, a supply of an education course is GST-free. Section 195-1 of the GST Act defines an education course to include a professional or trade course. It further defines a professional or trade course to mean 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. This means that the relevant training courses you supply will only be a professional or trade course if they lead to a qualification that is essential prerequisite for entry to, or to commence the practice of, a particular profession or trade. The Commissioner’s view on this is expressed in Goods and Services Tax Ruling GSTR 2003/1: Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1) Paragraph 43 of GSTR 2003/1 explains that in the context of the definition of a professional or trade course, a qualification is an attribute or quality that is acquired after undertaking a course. It is evidenced by some document that indicates successful completion of the course. The document would normally be accepted by a Commonwealth, State or Territory authority or a professional or trade association or an employer as suitable evidence that a person has successfully completed the relevant course. Paragraph 47 of GSTR 2003/1 provides that under the definition of essential prerequisite in section 195-1 of the GST Act, the qualification must be imposed by or under an industrial instrument or if not, by a professional or trade association that operates on a national or at a State or Territory level. An industrial instrument is defined under section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) to mean an Australian law or an award, order, determination or industrial agreement in force under an Australian law. Australian law is further defined under the same section of the ITAA 1997 to mean a Commonwealth law, a State law or a Territory law. Paragraph 48 of GSTR 2003/1 further provides that 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. Based on information gathered, in order to obtain a RePL to fly drones commercially, CASA requires a person to undertake certain training courses provided by their approved training organisations. It is only once CASA has been notified of the successful completion of these training courses that it will issue the person with a RePL. The facts show that you are a CASA approved training organisation certified to provide the relevant training courses as you are a holder of a ReOC for a certain period. In addition, the curriculum of your training courses had been approved by CASA and upon completion of your training courses, a student receives a certificate of completion and a recommendation from you to CASA for the issuance of the relevant RePL. Based on your recommendation, CASA will issue your students with the required RePL and/or AROC to enable them to fly drones commercially. In this regard, we consider the relevant training courses you supply to students to fly drones commercially whilst certified as an approved CASA training organisation will satisfy the definition of a professional or trade course. This is because they are essential prerequisites in order for a person to gain the qualification needed to enter into the profession or trade of flying drones for a commercial purpose as mandated by an industrial instrument. Therefore, your supply of the relevant training courses will be GST-free education courses under section 38-85 of the GST Act.