Private ruling: GST and education course
Published: October 2012

Ruling: Q1: Is the supply of the nationally accredited training courses a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. The supply of the nationally accredited training courses is a GST-free supply under section 38-85 of the GST Act | Q2: Is the payment made by the Governmental Department to you, subject to GST under section 9-5 of the GST Act? | A2: Yes. The payment is subject to GST under section 9-5 of the GST Act.

Relevant facts and circumstances: You are registered for GST You provide a training program to eligible participants. You receive payments from the Governmental Department to provide the training program Payments made by the Governmental Department for delivery of the training program are broken up into two areas: · Payment for delivery of the training courses · Payment for the delivery of the assistance program The training courses are national accredited courses. The assistance program includes administration of the assistance program, business mentoring and monitoring participants.

Relevant legislative provisions: 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 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1 Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) Schedule 2

Reasons for decision: Summary: The supply of the training courses is a GST-free supply under section 38-85 of the GST Act | Detailed Reasoning - Detailed reasoning: A supply of an 'education course' is GST-free under section 38-85 of the GST Act. The term 'education course' is defined in section 195 of the GST Act. That definition includes a number of different courses, and includes, amongst other things, a tertiary course. One definition of tertiary course in section 195-1 of the GST Act is 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 . Schedule 2 of the Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) (Determination 2009/2) provides that an accredited vocational and educational training program (VET) conducted by a registered training organisation (RTO) is a tertiary course. The Determination also provides that an entity is only considered to be an RTO when it provides courses, competencies and qualifications within its scope of registration. Paragraph 4 of Determination 2009/2 gives the definition of a registered training organisation as follows: An organisation that is registered by the relevant State or Territory training recognition authority in accordance with the Australian Quality Training Framework to provide one or more vocational education and training programmes. A vocational and education training program is defined in paragraph 4 of the Determination 2009/2 as: A Course that leads to an award of an AQF qualification or a Statement of Attainment, and the course must be: · an accredited vocational education and training course; or · a sequence of training consisting of one or more subjects or modules where each subject or module is from an accredited vocational education and training course; or · a structured approach to the development and attainment of competencies for a particular AQF qualification specified in an endorsed training package. Consequently, for the purposes of the GST Act, a VET program delivered by an RTO would be a tertiary course. In your case, you deliver nationally accredited training courses which are recognised by the Governmental Department. Therefore, the courses you deliver are within the scope of its registration as an RTO. We are satisfied that the accredited training courses you provide are tertiary courses which satisfy the requirements of Schedule 2 of the Determination No 2009/2. Accordingly, the supply of your training courses is GST-free in accordance with section 38-85 of the GST Act. Any fees that are charged for tuition, facilities and other curriculum related activities associated with these courses are not subject to GST as paragraph 38-85(b) of the GST Act allows for the GST free supply of administrative services directly related to the supply of an education course, supplied by the supplier of the course. | Summary: The payment is subject to GST under section 9-5 of the GST Act. | Detailed Reasoning - Detailed reasoning: GST is payable on taxable supplies. A supply is a taxable supply if all the conditions under section 9-5 of the GST Act are satisfied. Section 9-5 of the GST Act states: You make a taxable supply if: · you make a supply for consideration; and · the supply is made in the course or furtherance of an enterprise that you carry on; and · the supply is connected with Australia; and · you are registered, or required to be registered. However, the supply is not a taxable supply to the extent that it GST-free or input taxed. Under subsection 38-85(b) of the GST Act, the supply of administrative services directly related to the supply of an education course is GST-free, but only if they are supplied by the supplier of the course. In your case, the payment made by the Governmental Department is consideration for the supply of administrating the assistance program, business mentoring and monitoring participants. The supply is made in the course or furtherance of conducting your enterprise in Australia and you are registered for GST. The supply of the payment is not a GST-free supply. Although the payment relates to administrative services, amongst other things, it does not relate to the administrative services of the training course. Rather it relates to the administrative services of the assistance program. Accordingly, the supply of the assistance program is a taxable supply. The assistance payment made by the Governmental Department to you is subject to GST under section 9-5 of the GST Act.

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