Are the education/training courses supplied by X Pty Ltd GST-free under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
No. Your supply of the educational courses is not a GST-free supply under section 38-85 of the GST Act.
X Pty Ltd (you) is registered for goods and services tax (GST). You are not accredited with the Australian Skills Quality Authority (ASQA) as a Registered Training Organisation (RTO). The course is supplied by the Y. Y is not registered for GST. The academics who travel to Australia to teach the course are employed by Y. To date GST has been deducted from all fees paid by participants and has been remitted by you to the ATO offset by GST paid in expenditure for staging the program. The course is not explicitly marketed with the view that it will add to the employment related skills of people undertaking the course. Invoices will be issued to applicants by X. Invoices will be issued in Australian Dollars inclusive of GST.
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 section 38-85 A New Tax System (Goods and Services Tax) Act 1999 section 195-1
Summary The supply of your education courses delivered by the academics who travel to Australia to teach the course and are employed by Y, do not meet the requirements for being the supply of a GST-free education course under section 38-85 of the GST Act. Your supplies of education courses are taxable supplies under section 9-5 of the GST Act. Detailed reasoning GST-free A supply of an education course is GST-free under section 38-85 of the GST Act. Relevant to your circumstances, an education course is defined in section 195-1 of the GST Act to include, among other things: • a tertiary course; and • an adult and community education (ACE) course. Tertiary course Section 195-1 of the GST Act defines tertiary courseto mean: (a) a course of study or instruction that is a tertiary course determined by the Student Assistance Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of this Act; or (aa) a course of study or instruction accredited at Masters or Doctoral level and supplied by a higher education institution or a non-government higher education institution; or
(b) any other course of study or instruction that the Student Assistance Minister has determined is a tertiary course for the purposes of this Act. The Student Assistance Minister has not determined your courses to be 'tertiary courses', you are not a 'higher education institution' or a 'non-government higher education institution', and you are not accredited with ASQA as an RTO. Therefore, your education courses do not satisfy the requirements to be tertiary courses under section 195-1 of the GST Act. Adult and community education course An adult and community education course(ACE course) is defined in section 195-1 of the GST Act as a course of study or instruction that is likely to add to the employment related skills of people undertaking the course and: (a) is of a kind determined by the Student Assistance Minister to be an adult and community education course and is provided by, or on behalf of, a body: (i) that is a higher education institution; or (ii) that is recognised, by a State or Territory authority, as a provider of courses of a kind described in the determination; or
(iii) that is funded by a State or Territory on the basis that it is a provider of courses of a kind described in the determination; or (b) is determined by the Student Assistance Minister to be an adult and community education course. As your course is neither of a kind determined by the Student Assistance Minister, nor is it provided by a body specified in the definition, it is not an adult and community education course. As your supplies of courses do not satisfy the requirements to be a tertiary course or ACE course, the supply of your courses do not meet the requirements for being the supply of a GST-free education course under section 38-85 of the GST Act. Your supplies of the courses will be subject to GST if they are taxable supplies under section 9-5 of the GST Act which states: You make a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with the indirect tax zone (Australia); and (d) you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
The supplies of education courses offered by you to school principals and leadership educators in Australia satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act as: (a) you make the supplies of the course in return for consideration by way of payment; (b) you make the supply in the course of your business; (c) the services (courses) are performed/provided in Australia or made through an enterprise that you carry on in Australia (and therefore the supply is connected with Australia); and (d) you are registered for GST. There are no provisions in the GST Act which would make your supplies of the courses input taxed and, as discussed above, the supplies are not GST-free. Therefore, your supplies of courses are taxable supplies under section 9-5 of the GST Act.