GST and adult and community education courses provided to employees at the request of their employer

Is the entity, a not-for-profit body corporate, making a GST-free supply of an adult and community education (ACE) course under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a course to a group of employees at the request of their employer?

No, the entity is not making a GST-free supply of an ACE course under section 38-85 of the GST Act when it supplies a course to a group of employees at the request of their employer.

As the course is provided at the request of an employer to that employer's employees, the entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a not-for-profit body corporate that is registered for goods and services tax (GST).

The entity supplies a training course that provides a basic level of skill in a particular employment-related area. An employer requires a group of its employees to be trained in the particular area. The employer has requested the entity to provide the course to a group of that employer's employees. No-one other than the employer's employees is able to attend the particular supply of this course.

The supply satisfies the other positive limbs of section 9-5 of the GST Act.

The supply of an 'education course' is GST-free under section 38-85 of the GST Act. 'Education course' is defined in section 195-1 of the GST Act to include, amongst other things, an ACE course.

Section 195-1 of the GST Act provides, amongst other things, that an ACE course must be of a kind determined by the Education Minister to be an adult and community education course.

The Minister's determination is contained in A New Tax System (Goods and Services Tax)(Adult and Community Education Courses) Determination 2000 (the Determination). One of the requirements for a course to be of a kind described in the Determination is that the course must not be provided by or at the request of an employer to employees of that employer (paragraph 5(2)(c) of the Determination).

The employer requires a group of its employees to be trained in the particular area. The entity's course is provided at the request of the employer to the employees of that employer. As such, the course is not of a kind specified in the Determination and is not an ACE course that is GST-free under section 38-85 of the GST Act.

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 any other provision in Division 38 of the GST Act, nor is it 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 supplies a course to a group of employees at the request of their employer.