GST and assessment of prior learning for the purpose gaining a promotion

Is the entity, a 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 a promotion?

Yes, 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 a promotion.

The entity is a trade association. The entity supplies a service of assessing the qualifications held by a person for the purpose of that person gaining a promotion.

The entity conducts a test of that person's knowledge and skills and may also issue a qualification based on that test.

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.

An assessment or issue of qualifications for the purpose of employment encompasses assessment or issue of qualifications for any aspect of employment, including obtaining, retaining, advancement within or changing employment.

The entity's supply of assessing the qualifications of a person is for the purpose of that person gaining a promotion. A promotion is advancement within employment and, as such, the entity is making an assessment that is for a purpose of employment. Therefore, the entity's 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 • as authority of the Commonwealth or of a State or Territory, or • a local government body.

The entity is a 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 the GST Act when it assesses the qualifications of a person for the purpose of that person getting a promotion.