Issue
Is the entity, a registered training organisation, making a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it provides an accredited training course that is interspersed with training information from an unaccredited course?
Decision
Yes, the entity is making a GST-free supply under section 38-85 of the GST Act when it provides an accredited training course that is interspersed with training information from an unaccredited course.
Facts
The entity is a registered training organisation that is registered for goods and services tax (GST).
The entity is accredited to provide an accredited vocational education and training course from an accredited national training package. This accredited course is a tertiary course as defined in section 195-1 of the GST Act.
The entity provides this accredited course interspersed with training information from a separate unaccredited course. The unaccredited course is not a tertiary course, or any other type of education course, as defined in section 195-1 of the GST Act.
The information from the unaccredited course is specific to the State in which the accredited course is provided and is included to contribute to and complement the information in the accredited course. The information is not presented in such a way that it could be identified as a separate unit (subject) of the course.
Reasons for Decision
Under section 38-85 of the GST Act, a supply of an education course is GST-free. 'Education course' is defined in section 195-1 of the GST Act to include a tertiary course.
The accredited portion of the entity's course is a tertiary course. However, the interspersed unaccredited portion is not a training course or any other type of education course. Therefore, it needs to be determined whether the supply of the entity's course is entirely GST-free as an education course or whether only the accredited part of the course is GST-free.
Goods and Services Tax Ruling GSTR 2001/8 explains how to identify whether a supply includes taxable and non-taxable parts. A supply can either be: • a mixed supply (a supply containing separately identifiable taxable and non-taxable parts), or • a composite supply (a supply that appears to have separately identifiable parts but is essentially a supply of one thing).
Paragraph 17 of GSTR 2001/8 provides: If you made a supply that contains a dominant part and the supply includes something that is integral, ancillary or incidental to that part, then the supply is composite. You treat a composite supply as a supply of a single thing. ...
Further, paragraph 59 of GSTR 2001/8 provides: ...That is, we consider that a part of a supply will be integral, ancillary or incidental where it is insignificant in value or function, or merely contributes to or complements the use or enjoyment of the dominant part of the supply. ...
The information from the unaccredited course is specific to the State in which the accredited course is provided and is included to contribute to and complement the information in the accredited course. The information is not presented in such a way that it could be identified as a separate unit (subject) of the course. The accredited part of the course that the entity supplies is the dominant part of the supply.
Therefore, the unaccredited portion of the course forms a minor part of the course that contributes to and complements the dominant part of the course. As the unaccredited portion is integral, ancillary and incidental to the dominant accredited unit, the entity is making a single composite supply. This single supply is a supply of a tertiary course as defined in section 195-1 of the GST Act.
The entity is supplying an education course that is GST-free under section 38-85 of the GST Act when it provides an accredited training course that is interspersed with training information from an unaccredited course. Note: Where a course consists of units (subjects) that are accredited and units (subjects) that are not, the supply of the course is a mixed supply with separately identifiable parts (paragraph 71 of GSTR 2001/8). Whether unaccredited material is separately identifiable from accredited material will be determined by the facts of each case.