GST and assessment of prior learning for access to a taxable education course

Is the entity, a professional or trade 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 qualifications of a person for the purpose of that person gaining access to an education course, where the supply of the education course will be a taxable supply?

Yes, the entity is making a GST-free supply under section 38-110 of GST Act when it assesses the qualifications of a person for the purpose of that person gaining access to an education course, where the supply of the education course will be a taxable supply.

The entity is a professional or trade association. The entity supplies a service of assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills.

The resulting assessment or qualification is for the purpose of the person gaining access to an education course. The supply of the education course will be a taxable supply.

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

A supply is GST-free under subsection 38-110(1) of the GST Act when 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.

The entity supplies a service of assessing the qualifications held by a person or conducting a test to assess a person's knowledge and skills. The entity's assessment is for the purpose of the person gaining access to an education course the supply of which will be taxable. It does not matter whether the supply of the education course will be taxable supply, as it is not a requirement in subsection 38-110(1) of the GST Act that the purpose of the assessment or qualification be for access to a GST-free education course. As such, the purpose of the entity's supply is for access to education and the supply satisfies the requirements in subsection 38-110(1) of the GST Act.

However, 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.

The entity is a professional or trade association. Therefore, the entity's supply is not excluded from being GST-free.

Accordingly, the entity is making a GST-free supply under section 38-110 of GST Act when it assesses the qualifications of a person for the purpose of that person gaining access to an education course, where the supply of the education course will be a taxable supply.