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Is the entity, a supplier of educational assessments, making a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it charges a change of preference fee for administrative services associated with processing change of preference applications?

No, the entity is not making a GST-free supply under section 38-85 of the GST Act when it charges a change of preference fee for administrative services associated with processing change of preference applications. It is making a taxable supply under section 9-5 of the GST Act.

The entity is a government authority. It assesses applications that are made for entry into an education course. The entity does not provide the education course. The entity charges a change of preference fee for administrative services associated with processing change of preference applications.

The entity is registered for goods and services tax (GST). The entity satisfies the other positive limbs of section 9-5 of the GST Act.

Under section 38-85 of the GST Act, a supply is GST-free if it is a supply of: • an education course; or • administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

Pursuant to paragraph 38-85(b) of the GST Act, the provision of administrative services related to an education course is GST-free if the supplier of the course provides the services. However, in this case, the entity that provides the administrative services is not the supplier of the course. As such, section 38-85 of the GST Act is not satisfied.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it charges a preference fee for administrative services associated with processing change of preference applications. [Note: Section 38-110 of the GST Act does not apply because the entity is not providing an assessment of qualifications for entry into an education course].