GST and professional or trade courses

Is the entity, a professional association, 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 supplies a training course which leads to a qualification that is legally required to enter a particular trade or profession?

Yes, the entity is making a GST-free supply under section 38-85 of the GST Act when it supplies a training course which leads to a qualification that is legally required to enter a particular trade or profession.

The entity is a professional association which represents the interests of its members and provides advice to relevant bodies on the professional standards required in the practice of that profession.

The entity is supplying a training course which leads to the gaining of a qualification that is legally required, under the relevant laws, for entry to or commencement in that profession.

The entity is registered for goods and services tax (GST).

Section 38-85 of the GST Act provides that the supply of an education course is GST-free. The definition of 'education course' in section 195-1 of the GST Act includes a professional or trade course.

'Professional or trade course' is defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite: • for entry to a particular profession or trade in Australia; or • to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.

Under the definition of 'essential prerequisite' in section 195-1 of the GST Act, a qualification is an essential prerequisite where there is a legal requirement for the qualification, for example, it is imposed by or under a law, regulation or industrial agreement; or there is a requirement imposed by a professional or trade association, either nationally or on a state basis.

In this case, the training course supplied by the entity leads to the gaining of a qualification that is legally required, under the relevant laws, for entry to or commencement in that profession.

As the entity is supplying a course that meets the requirements of a professional or trade course, as defined in section 195-1 of the GST Act, it is making a GST-free supply under section 38-85 of the GST Act.