Issue
Is the entity, a government authority, 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 applications for exemptions from units or modules of an education course?
Decision
Yes, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses applications for exemptions from units or modules of an education course.
Facts
The entity is a government authority. The entity assesses applications for exemptions from units or modules to enrol in an education course. The entity receives a fee for making the assessments.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under 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: • access to education; • membership of a professional or trade association; • registration or licensing for a particular occupation; or • employment.
In this case, the supply being made by the entity is the assessment of an applicant's claims for exemptions from units or modules of an education course. An applicant who is successful in obtaining an exemption from a unit or module has accessed that unit or module and has received a pass mark for it. That unit or module will be included in the student's results and those results will indicate that the student has received an exemption.
Therefore, although the student will not actually enrol in a unit or module for which an exemption is granted, it is considered that the student has accessed that unit or module and has received a pass mark for it. The supply of this assessment is for the purpose of access to education and therefore, satisfies paragraph 38-110(1)(a) of the GST Act.
Subsection 38-110(2) of the GST Act provides that a supply is not GST-free under subsection 38-110(1) of the GST Act unless the supply is carried out by: • a professional or trade association; • an education institution; • an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services; • an authority of the Commonwealth or of a State or Territory; or • a local government body.
In this case, the supply satisfies paragraph 38-110(2)(d) of the GST Act as an authority of the Commonwealth or of a State or Territory carries out the assessment.
Therefore, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses an applicant's claims for exemptions from units or modules of an education course.