GST and assessment of prior learning by a registered training organisation

Is the entity, a registered training organisation, 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?

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.

The entity is a registered training organisation. 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 purpose of the assessment is for the person to gain access to an education course.

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. As such, 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 registered training organisation. The term 'education institution' is defined by section 195-1 of the GST Act to have the meaning given by subsection 3(1) of the Student Assistance Act 1973 .

Subsection 3(1) of the Student Assistance Act provides that an education institution means: (a) a higher education institution (b) a technical and further education institution (c) a secondary school or (d) any other institution (including an educational institution), authority or body, that is in Australia and that, in accordance with a determination by the Minister, is to be regarded as an education institution for the purposes of this Act.

Subsection 5(2) of the Determination No. 2002/1 - Determination of Education Institutions and Courses under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 (Education Minister's Determination) lists the institutions, authorities or bodies that are to be regarded as education institutions. Registered training organisations are listed and therefore regarded as education institutions.

The entity is a registered training organisation and as such, is an education institution for the purposes of subsection 38-110(2) of the GST Act. The entity's supply is not excluded from being GST-free by subsection 38-110(2) of the GST Act.

Accordingly, the entity is making a GST-free supply under section 38-110 of the GST Act when it assesses the qualifications of a person for the purpose of that person gaining access to an education course. Note: A registered training organisation is an organisation that is registered by the relevant State or Territory training recognition authority in accordance with the Australian Quality Training Framework to provide one or more vocational education and training programmes.