Private ruling: GST
Date of advice: 23 February 2018
Published: June 2018

Ruling: Q1: Is your supply of professional supervision services to provisionally registered psychologists (interns) GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You are an entity and you are registered for goods and services tax (GST). You are a registered psychologist. You are an approved supervisor by the Psychology Board of Australia AHPRA. You undertake supervision of provisional psychologists, completing their internship under your professional guidance, and evaluation of their work, in order for them to gain general registration as a psychologist. This involves mentoring, and providing professional development, to the provisional psychologists. You provide professional supervision to provisionally registered psychologists (interns) undertaking the 5+1 internship program, undergoing supervised practice as a formally required part of their training to become registered psychologists. All provisional psychologists must conduct their internship program in accordance with an internship program plan that has been developed in the appropriate form and agreed to by the provisional psychologist and supervisors. The internship program plan must be approved by the Psychology Board of Australia (the Board) before commencing the internship. The internship program plan is an agreement between the supervisors and the individual provisional psychologist and the Board. The internship program plan sets out how the proposed psychological practice, supervision, and professional development will enable the provisional psychologist to attain all the core competencies of the internship program and how the supervisors will contribute to this process. The internship program plan must be reviewed at least once every six months in order to ensure that the provisional psychologist is meeting the training objectives of each of eight core competencies. Completion of the 5+1 internship program leads to a qualification and general registration as a psychologist. You charge the interns a fee for your supervision services.

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 38-85; and | A New Tax System (Goods and Services Tax) Act 1999 section 195-1.

Reasons for decision: Summary: Subsection 7-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that GST is payable on taxable supplies. Under section 9-5 of the GST Act, you make a taxable supply if: ● you make the supply for consideration; ● the supply is made in the course or furtherance of an enterprise that you carry on; ● the supply is connected with the indirect tax zone (such as, Australia); ● you are registered or required to be registered for GST; and ● the supply is neither GST-free nor input taxed. GST is not payable where a supply is GST-free or input taxed. There are no provisions of the GST Act under which your supply of the supervision services is input taxed. However, the supply may be GST-free under Division 38 of the GST Act. Paragraph 38-85(a) of the GST Act provides that a supply of an education course as defined in the GST Act is GST-free. Therefore, we need to consider whether the supply of your supervision services as a professional psychologist to provisional psychologists is the supply of an education course. Section 195-1 of the GST Act includes a professional or trade course in the definition of education course. Professional or trade course is defined in section 195-1 of the GST Act: 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. Section 195-1 of the GST Act defines ‘essential prerequisite’ for the purposes of the definition of professional or trade course. It 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. An ‘industrial instrument’ includes an Australian law. Goods and Services Tax Ruling GSTR 2003/1 discusses the meaning of professional or trade courses for GST purposes. Whether you supply a course is a question of fact. In the context of the definition of a professional or trade course in section 195-1 of the GST Act, a course is a program of systematic and interactive instruction or training, for the acquisition of particular skills or knowledge. According to paragraph 22 of GSTR 2003/1, indicators of a course include: ● delivery of educational instruction through an instructor or teacher; ● ongoing support and guidance, for example, being available to answer questions; ● assessment of the individual’s progress; ● monitoring or supervision; ● provision of feedback concerning the individual; and ● assessment of competency or satisfactory completion at the end of the program of instruction. 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. Paragraph 81 of GSTR 2003/1 distinguishes between a person entering into a particular profession and a person commencing the practice of a profession on their own account. It states: 81. Entry into a particular profession or trade may be on the basis of a qualification that enables the relevant person to perform work on a supervised basis, but that qualification does not enable the person to commence practice on his or her own account without some additional qualification being obtained. In these situations, both qualifications are essential prerequisites, one being an essential prerequisite for entry into the profession or trade; the other being an essential prerequisite to commence the practice of the profession or trade. Courses leading to each qualification will be professional or trade courses. Paragraphs 43 to 45 of GSTR 2003/1 explain the meaning of qualification. Documents that are qualifications or that provide evidence of a qualification include: ● a statement of satisfactory completion; ● a certificate (including a degree or diploma); ● a licence; or ● an accreditation. Paragraph 48 of GSTR 2003/1 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. 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. On the basis of the facts provided, the supervision provided by you is a professional or trade course leading to a qualification provided by a professional association, in this case the Psychology Board of Australia. This qualification is an essential prerequisite for the provisional psychologists to commence practice as fully registered general psychologists. Therefore, your supply of the supervision services to provisional psychologists is a supply of an education course that is GST-free. Consequently, GST is not payable on your supply of supervision services to the provisional psychologists.