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Edited version of private ruling
Authorisation Number: 1011442246385
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Ruling
Subject: GST and supply of a tertiary course
Question
Is the supply of the course a GST-free supply of a tertiary course?
Answer
Yes.
Relevant facts and circumstances
Your ruling is based on the following facts.
You are a registered training organisation (RTO).
You are registered by the relevant state board to provide certain courses, conduct assessments and issue qualifications on a national basis.
Under an agreement, the course is delivered by other entities on your behalf.
The course is a performance based program which must be completed within 12 months from the start of the course. It is made up of knowledge (theoretical understanding) and skills (practising) components.
Assessment for the successful completion of the course requires the student to participate in activities under the supervision of an instructor. The student must also successfully complete the theoretical components. Prior to final assessment, the student must complete a series of activities.
Upon completion of the course, a student receives a statement of attainment. The statement of attainment recognises the student as having earned units of competency from an endorsed training package
The course is not an accredited course in its own right. However, it fulfils certain prescribed units of competency for an accredited course.
Course fees are set by the other entities in accordance with their respective cost structure and vary from state to state.
You provide course materials to the other entities throughout Australia.
You delegate your authority as an RTO to other entities to deliver the course in your behalf. This is compliant with the requirement for maintaining your status as an RTO.
Reasons for decision
GST is payable on taxable supplies. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:
'You make a taxable supply if:
- you make the supply for *consideration; and
- the supply is made in the course or furtherance of an *enterprise that you *carry on; and
- the supply is *connected with Australia; and
- 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.
(*denotes a term defined in section 195-1 of the GST Act)
Under section 38-85 of the GST Act, the supply of an education course is GST-free. 'Education course' includes, amongst other things, a tertiary course.
'Tertiary course' is defined in section 195-1 of the GST Act as:
- a course of study or instruction that is a tertiary course determined by the *Education Minister under subsection 5D(1) of the Student Assistance Act 1973 for the purposes of that Act; or
- (aa) 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
- any other course of study or instruction that the Education Minister has determined is a tertiary course for the purposes of this Act.
The Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2) defines a tertiary course as a full-time course that includes a vocational education and training program provided by a higher education institution or a registered training organisation.
Determination No. 2009/2 further defines a vocational education and training program as a course that leads to an award of an AQF qualification or a Statement of Attainment, and the course must be:
- an accredited vocational education and training course; or
- a sequence of training consisting of one or more subjects or modules where each subject or module is from an accredited vocational education and training course; or
- a structured approach to the development and attainment of competencies for a particular AQF qualification specified in an endorsed training package.
'Statement of Attainment' is not defined in Determination No.2009/2. The following definition is provided in the NSW Vocational Education and Training Act 2005:
statement of attainment means formal certification by an RTO that a person has achieved:
- part of a qualification, or
- one or more units of competency from a training package endorsed by the relevant Commonwealth agency, or
- all the units of competency or modules comprising learning outcomes for an accredited course that does not meet the requirements for a qualification.
You advised that a student who completes the course is awarded a statement of attainment. The statement of attainment recognises the student as having achieved units of competencies. Therefore, the units of competency test is satisfied.
Additionally, the units of competency must be for a particular accredited course specified in an endorsed training package.
The competencies above can be used toward satisfying the requirements of an accredited course specified in the endorsed training package. As such, the course satisfies the requirement that it leads to a statement of attainment and the course is an accredited vocational education and training course.
Goods and Services Tax Ruling GSTR 2001/1, Goods and services tax: supplies that are GST-free for tertiary education courses, deals with supplies of tertiary courses that are GST free. Paragraph 24 of GSTR 2001/1 states:
24. Where you supply one unit of a tertiary course that is covered by theEducation Minister's determination and the recipient is enrolled in that unit, the supply of that unit is GST-free.
Accordingly, the supply of the course is a GST-free supply of a tertiary course.
The course conducted by you as an RTO
Goods and Services Tax Ruling GSTR 2006/9, Goods and services tax: supplies, discusses propositions that apply in analysing multi-party arrangements commonly known as tripartite arrangements.
Proposition 16 in GSTR 2006/9 provides that the total fact situation will determine the nature of the transaction, the entity that makes the supply and the recipient of the supply. Paragraph 222 of GSTR 2006/9 states:
222. Where the parties to a transaction have reduced their understanding of the transaction to writing, that documentation is the logical starting point in determining the supplies that have been made. An examination of any relevant documentation and the surrounding circumstances, which together form the total fact situation, is also important in determining whether the documentation captures the nature of a transaction for GST purposes.
In your case, you advised that you delegate your authority as an RTO to the other entities to deliver the course in your behalf. The delivery of the course by the other entities is compliant with the requirements of the Australian quality training framework for maintaining your status as an RTO. Therefore, we accept that the course is conducted by you.
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