Are your co curriculum classes GST-free under Subdivision 38-C of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Yes
You are a xxxx School. You are a registered charity with the Australian Charities and Not-for-profits Commission (ACNC) and operates on a not-for-profit basis. You are registered for GST. You provide educational services to children in accordance with its charitable purpose. You established a xxxx academy as an internal co-curricular initiative to enhance student engagement in the performing arts. The Academy provides classes of structured instruction in various disciplines including a variety of xx and xx classes. Xx and xx classes take place out outside of school hours during school term and are exclusively available to students enrolled at your school. The Academy is intended support student development in creativity, communication and confidence. You view the xx and xx classes as co-curricular in nature and closely aligned with the enhancement of the school curricular xx program. Further, participation supports student learning and engagement in areas complementary to the National Curriculum. The Academy is managed by a fulltime coordinator. The coordinator is an employee. The classes are held in on your premises and run by casual instructors that are employed by you.
You issue invoices to enrolled students for the xx and xx classes. The invoice is separate to tuition fees and charges.
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-85 A New Tax System (Goods and Services Tax) Act 1999 section 38-250 A New Tax System (Goods and Services Tax) Act 1999 section 195-1
An entity makes a taxable supply where all the requirements of section 9-5 are satisfied. Section 9-5 provides that 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 Australia; and d) you are *registered or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. The xx and xx classes provided by you satisfy elements (a)-(d) of section 9-5. Therefore, we must determine if the xx and xx classes are either GST-free or input taxed. There are no provisions in the GST Act under which the xx and xx classes are input taxed. Therefore, what remains to be determined is whether the xx and xx classes are GST-free. Paragraph 38-85(a) of the GST Act provides that a supply of an education course is GST-free. In accordance with section 195-1 of the GST Act, the definition of 'education course' includes, among other things, a primary course and a secondary course. Primary course is defined in section 195-1 of the GST Act. It states: primary course means:
(a) a course of study or instruction that is delivered: (i) in accordance with a primary curriculum recognised by the education authority of the State or Territory in which the course is delivered; and (ii) by a *school that is recognised as a primary school under the law of the State or Territory; or (b) any other course of study or instruction that the *Education Minister has determined is a primary course for the purposes of this Act. Secondary course is defined in section 195-1 of the GST Act. It states: secondary course means: (a) a course of study or instruction that is a secondary course determined by the *Education Minister under subsection 5D(a) of the Student Assistance Act 1973 for the purposes of that Act; or (b) any other course of study or instruction that the *Education Minister has determined is a secondary course for the purposes of this Act. Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) provides that accredited secondary courses supplied by secondary schools are secondary courses. You are a school that supplies GST-free primary and secondary courses.
Goods and Services Tax Ruling GSTR 2000/30 Goods and services tax: supplies that are GST-free for pre-school, primary and secondary education courses (GSTR 2000/30) explains when there is a supply of pre-school, primary and secondary education courses and which supplies related to such education courses, are GST-free under Subdivision 38-C. Paragraphs 42 to 47 of GSTR 2000/30 discuss the supply of activities that are related to a primary school or secondary school curriculum, namely: 42. The supply of curriculum related activities is part of the supply of an education course. Curriculum related activities include visits to you by organisations such as animal farms, theatre companies and science fairs. 43. The supply of curriculum related instruction is part of the supply of an education course. Curriculum related instruction includes instruction by external tutors or any third parties engaged by you to deliver part or all of the curriculum. It also includes remedial and advanced (extension) teaching provided by you for individual students.
44. As the supply of curriculum related activities and instruction is part of the supply of an education course, it is irrelevant whether the amount charged for the activity or instruction is included in the fee you charge for the course or whether it is charged separately. The amount charged must be paid to you, as the supplier of the education course. If the amount charged for the activities or instruction is paid by students to the provider of the activities or instruction, it is not GST-free to students as a supply of an education course. 45. However, if the provider is approved by the relevant state or territory body to conduct a pre-school, primary or secondary course, the supply made to students is the supply of an education course in its own right and is GST-free. 46. If the supply of the activity or instruction to you is made by an entity that is registered or required to be registered, the supply to you is a taxable supplyand the amount you pay for the activities or instruction includes GST. You are entitled to input tax credits in respect of the GST paid on the acquisitions by you of activities or instruction. The subsequent supply that you make to students is GST-free.
Example - Remedial Teaching 47. Georgia is a Year 7 student and the school engages a private tutor to assist Georgia with her reading skills. The private tutor charges the school a GST inclusive fee. Engaging the services of private tutors to assist students with learning difficulties is a creditable acquisition and the school is entitled to an input tax credit for the GST paid. The subsequent supply by the school to Georgia is GST-free. In your circumstances, you are a school that supplies GST-free primary and secondary courses. You also provide xx and xx classes to enrolled students. Instructors and facilities for the xx and xx classes are supplied by you. Enrolled students provide consideration for the supply of the xx and xx classes to you. You also advised that the xx and xx classes participation support student learning and engagement in areas complementary to the National Curriculum. Based on the information that you have provided, the supply of xx and xx classes to the students enrolled in your school is GST-free as these are curriculum related activities and therefore part of a supply of a primary or secondary course.