Private ruling: GST and special education courses
Date of advice: 21 November 2023
Published: 8 January 2024
Ruling period: xx xxx 20xx to xx xxx 20xx
Date scheme commenced: xx xxx 20xx

Ruling: Q1: Are your supplies of specialist tutoring services GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. | Q2: Are your supplies of course materials GST-free under section 38-95 of the GST Act? | A2: The following contents of the student folder will be GST-free: • 1 x Scrapbook • 1 x Writing book • 2 x Led pencils • 1 x Eraser The following contents of the student folder will not be GST-free, as the items are not consumed or transformed as part of the special education course: • 1 x Zip folder • 1 x Pencil case

Relevant facts and circumstances: You carry on a specialist tutoring business. You are registered for GST. You are a qualified teacher, and you hold registration with your Registration Board. You design specialist tutoring services to address the intellectual and academic needs of children with specific learning difficulties (SLDs), including: • Autism • ADHD • Dyslexia • Dysgraphia • Dyscalculia • Dyspraxia • Language Delay • Auditory Processing Disorder (APD) • Low Working Memory • Developmental Language Delay (DLD). You are specially trained to deliver the specialist tutoring services. The marketing material on your website markets your specialist tutoring services as early intervention services for children with SLDs. You have made modifications to the specialist tutoring services to meet the needs of children with SLDs. Including, the use of mobile applications and interactive learning tools that assist children with SLDs to learn more effectively. You make your specialist tutoring services available to children who are working through the school curriculum. You have received feedback from parents, children, and teachers that your specialist tutoring services enable children to engage with the school curriculum more effectively. You deliver your specialist tutoring services personally on a 1:1 basis. At a minimum, children engaging in your specialist tutoring services attend an hourly session once per week. Each child works through an individual tutoring program at their own learning pace, with the duration of the program dependent upon the time taken to master the skills being taught. At the beginning of the program, the child is individually assessed utilising assessment tools to determine their starting ability. The child is then assessed on an ongoing basis. A formal review is conducted at the end of each school term to test mastery of the program. This assessment is used to inform knowledge gaps. Units of learning are repeated where necessary to address any identified deficiencies in the child's skills. Feedback is provided directly to parent/s or guardian/s on their child's development through their individual tutoring program. At the beginning of each individual tutoring program, you provide the child with a student folder (the 'course materials'). The student folder is used by the child to complete learning exercises, and comprises the following: • 1 x Zip folder • 1 x Scrapbook • 1 x Writing book • 1 x Pencil case • 2 x Led pencils • 1 x Eraser.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 • section 38-85 | • section 38-95 | • section 195-1

Reasons for decision: Summary: A supply of an education course is GST-free under paragraph 38-85(a) of the GST Act. Section 195-1 of the GST Act relevantly includes a 'special education course' within the meaning of an education course. The term 'special education course' is defined under section 195-1 of the GST Act to mean: ...a course of education that provides special programs designed specifically for children with disabilities or students with disabilities (or both). The Commissioner's view on the meaning of 'special education course' is set out in Goods and Services Tax Ruling GSTR 2002/1 Goods and services tax: supplies that are GST-free as special education courses (GSTR 2002/1). The Commissioner considers at paragraphs 40 to 41 of GSTR 2002/1 that whether a special education course is GST-free depends on the attributes of the course, and not on the status of the course provider: 40. Where all of the requirements of the section 195-1 definition of a special education course are satisfied, the course is GST-free, regardless of who provides the course. 41. A special education course is not restricted under the GST Act to programs that are provided by a school, special school, government centre or non-government centre. Your specialist tutoring services will meet the requirements of a special education course, if: • they are courses of education; • they provide special programs; and • the special programs are designed specifically for children with disabilities or students with disabilities (or both). The Commissioner accepts that SLDs are a functional or structural impairment that amounts to a disability for the purposes of this definition (GSTR 2002/1, paragraph 34). | Detailed Reasoning - Course of Education: Your specialist tutoring services are 'courses of education' as they are programs of study involving systemic schooling of scholastic and academic pursuits (GSTR 2002/1, paragraphs 14 to 15). You deliver systemic schooling to children in the form of a series of tutoring sessions or lessons that include the following elements of interactive teaching: • 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. (GSTR 2002/1, paragraphs 16 to 17) | Detailed Reasoning - Special Program: Your specialist tutoring services have a special character that distinguishes them from general education services. They are designed specifically, and delivered in such a way, to meet the needs of children with SLDs. | Detailed Reasoning - Designed Specifically for Children with Disabilities: It is necessary 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. At paragraph 22 of GSTR 2002/1, the Commissioner sets out relevant matters to be considered: • 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. In your case, your intention to design your specialist tutoring services for children with disabilities is demonstrated by the marketing material on your website. Your services are marketed specifically as an early intervention service to help children with SLDs. Your specialist tutoring services have the character of a special program as the content and methods of delivery are designed for children with SLDs. You employ instructional approaches specifically developed for children with SLDs, and you use interactive learning tools to assist children with SLDs to learn more effectively. Your Programs are only offered on a 1:1 basis to deliver education that is both specialised and personalised. You deliver individual education plans that are tailored to the needs of each child, and you are professionally trained to teach children with SLDs. It is accepted that your programs are designed specifically for children with SLDs. Your specialist tutoring services therefore satisfy the requirements of a 'special education course.' Where you charge a fee for the supply of an education course that consists of tuition, facilities and other curriculum related activities and instruction only, this fee is GST-free under paragraph 38-85(a) of the GST Act. | Detailed Reasoning - Question 2: A supply of 'course materials' for a subject undertaken in an education course is GST-free under section 38-95 of the GST Act. The term 'course materials' is defined under section 195-1 of the GST Act to include: ...materials provided by the entity supplying the course that are necessarily consumed or transformed by the students undertaking the course for the purposes of the course. The Commissioner's view on the meaning of 'course materials' is set out in 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). The Commissioner considers at paragraph 71 of GSTR 2000/30 that course materials are materials or items that satisfy the following requirements: • The materials or items are provided by you to students; • The materials are necessarily consumed or transformed by the students undertaking the course; and • The materials are consumed or transformed for the purpose of the course. The requirement that the materials or items be 'consumed' or 'transformed' has been interpreted to mean 'used up,' 'expended,' or 'changed in form' (GSTR 2000/30, paragraphs 77 to 79). The Commissioner lists art supplies, workbooks, and consumable stationary as examples of items or materials that are capable of being 'consumed' or 'transformed' in undertaking an education course (GSTR 2000/30, paragraph 80). Items that retain their generic application for other purposes following the completion of an education course are not considered to have been consumed or transformed. At paragraphs 83 to 87 of GSTR 2000/30, the Commissioner uses the example of a course pack that includes a calculator and compass to conclude: 85. The calculator and compass are not course materials and are subject to GST as these items are not consumed or transformed as part of the primary course. It is accepted that the consumable items and materials included in your student folder are course materials that the children use up and convert into class work in undertaking your programs and are GST-free under section 38-95 of the GST Act. However, the zip folder and pencil case retain their generic application and are not used up or converted by children undertaking your programs. They are not GST-free under section 38-95 of the GST Act.