GST and Assessment of overseas-trained professionals

Is the entity, a professional association, making a GST-free supply under section 38-110 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it assesses the overseas qualifications of overseas-trained professionals?

Yes, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the overseas qualifications of overseas-trained professionals.

The entity, which is registered for GST, is a professional association charged with the responsibility of accrediting schools, courses and schools of training (within Australia) leading to professional qualifications. The entity's members are regional professional bodies from various States and Territories.

In Australia, separate laws in each State or Territory regulate the registration requirements for this profession. In each State or Territory, either the regional bodies or branches of government administer the registration requirements.

In order for overseas-trained professionals to be able to be register in Australia, they must have their competency accepted by the National Office of Overseas Skills Recognition (NOOSR). NOOSR has empowered the entity to assess the educational qualifications and work experience of the overseas-trained professionals. The overseas-trained professionals must sit both a written and practical examination to evaluate their competencies. The entity charges the overseas-trained professionals a fee for this assessment. The assessment allows the overseas-trained professionals to undertake the profession in Australia.

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

According to subsection 38-110(1) of the GST Act, a supply is GST-free if the supply is the assessment or issue of qualifications for the purpose of: (a) access to education; or (b) membership of a professional or trade association; or (c) registration or licensing for a particular occupation; or (d) employment.

In this case, the entity provides both a written and practical examinations to evaluate the overseas-trained professionals competencies to determine whether they can be registered and undertake the profession in Australia. Therefore, the supply of these examinations by the entity is an assessment or issue of qualifications for the purpose of either or licensing for a particular occupation registration (paragraph 38-110(1)(c) of the GST Act) or employment registration (paragraph 38-110(1)(d) of the GST Act).

Under subsection 38-110(2) of the GST Act, a supply will not be GST-free unless the supply is carried out by a professional or trade association.

In this case, the supply does satisfy the provisions of this subsection as the examination is carried out by the entity, which is a professional association.

Therefore, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the overseas qualifications of overseas-trained professionals.