The ATO has updated information on its website and advised that for businesses that are recognised adult and community education (ACE) course providers for the purposes of the GST law, their sales of ACE courses to students are GST-free (under s38-85, and the definition of ‘education course’ and ‘adult and community education course’, in s195-1, of the GST Law).

However, for those who are a representative or agent of an ACE course provider, their service of delivering an ACE course is not GST-free. For an independent third party who purchases the right to sell an ACE course to students, their sales of the course to students are not GST-free.

For an ACE course to be GST-free, the ATO says:

  • it must be likely to add to the employment-related skills of its students;
  • the provider must be a recognised ACE course provider, delivering the course to students directly or through their employees or representative.

The ATO’s view is that an ACE course is considered likely to add to the student’s employment-related skills if it:

  • specifies the employment-related skills participants will acquire in its course objectives;
  • clearly sets out how participants will learn the skills, before the course begins;
  • teaches skills reasonably likely to be used at work, or in a business, occupation, profession, or trade, rather than for a hobby or recreation.

The course must not:

  • be provided by or for an employer to their employees
  • be provided by or for an organisation to their members, except for general community organisations with few restrictions on membership
  • be private or individual tuition, and
  • be one of the following courses (that are defined separately and may be GST-free in their own right)
    • secondary, tertiary, or special education
    • an English language course for overseas students
    • a professional or trade course
    • a first aid or lifesaving course
    • a tertiary residential college course.

The course must not:

  • be provided by or for an employer to their employees
  • be provided by or for an organisation to their members, except for general community organisations with few restrictions on membership
  • be private or individual tuition, and
  • be one of the following courses (that are defined separately and may be GST-free in their own right)
    • secondary, tertiary, or special education
    • an English language course for overseas students
    • a professional or trade course
    • a first aid or lifesaving course
    • a tertiary residential college course.

[ATO website – Adult & Community Education, GSTR 2000/27; LTN 228, 28/11/17; Tax Month Nov 2017]

Section 38-85 of the GST Act – Education Courses

                  38-85    A supply is GST-free if it is a supply of:

                     (a)  an * education course; or

                     (b)  administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course.

Section 195-1 of the GST Act – Definitions

“education course means:

                     (a)  a * pre-school course; or

                     (b)  a * primary course; or

                     (c)  a * secondary course; or

                     (d)  a * tertiary course; or

                      (f)  a * special education course; or

                     (g)  an * adult and community education course; or

                     (h)  an * English language course for overseas students; or

                      (i)  a * first aid or life saving course; or

                      (j)  a * professional or trade course; or

                     (k)  a * tertiary residential college course.

“adult and community education course means 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.

 

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