ATO Interpretative Decision
ATO ID 2002/1063 (Withdrawn)
Goods and Services Tax
GST and the supply of a journalism course
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This ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decision.
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This document has changed over time. View its history. |
FOI status: may be released
Status of this decision: Decision Withdrawn 10 February 2006
 CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser. |
Issue
Is the entity, a provider of training courses, 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 supplies a journalism course?
Decision
No, the entity is not making a GST-free supply under section 38-85 of the GST Act when it supplies a journalism course. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a provider of training courses. The entity supplies a one year, full time journalism course, and operates on a for profit basis.
Upon successful completion of the course, a participant is awarded with a Diploma in journalism. However, this qualification is not legally required for entry to, or to commence practice in the field of journalism in Australia. There is not any professional or trade association that requires its members to obtain this qualification, either nationally or on a state basis.
The entity is not a higher education institution, or a registered training organisation (RTO), nor is it recognised or funded as a provider of an adult education (ACE) course as defined in section 195-1 of the GST Act. Furthermore, the entity is not a body corporate operating on a not-for-profit basis.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Section 38-85 of the GST Act provides that the supply of an education course is GST-free. The definition of education course in section 195-1 of the GST Act includes, amongst other things, a tertiary course, an ACE course and a professional or trade course. These are the only education courses from the definition in section 195-1 of the GST Act that could be relevant to the entity's situation.
Tertiary course
To be GST-free as a tertiary course (as defined in section 195-1 of the GST Act), a course must satisfy the Education Minister's determination under subsection 5D(1) of the Student Assistance Act 1973 (Determination No. 1999/2). Determination No. 1999/2 provides that a tertiary course for the purposes of section 195-1 of the GST Act is a course that is:
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- specified in Column 1 of Schedule 2 of the Determination; and
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- conducted by an education institution specified in Column 2 of Schedule 2 of the Determination.
The journalism course provided by the entity is not listed in Column 1 of Schedule 2 of Determination No. 1999/2. Furthermore, as the entity is neither an RTO nor a higher education institution, it is not an education institution as specified in Column 2 of Schedule 2 of Determination No. 1999/2. Therefore, the entity's journalism course does not satisfy the requirements of Determination No. 1999/2 and is not a tertiary course as defined in section 195-1 of the GST Act.
Adult and community education course
The term 'adult and community education course' is defined in section 195-1 of the GST Act. To satisfy this definition and be a GST-free education course under section 38-85 of the GST Act, a course must, amongst other things, be provided by, or on behalf of, a body that is recognised or funded as a provider of ACE courses or a body corporate operating on a not-for-profit basis.
The entity is not recognised or funded as a provider of an ACE course as defined in section 195-1 of the GST Act, nor is it a body corporate operating on a not-for-profit basis. Therefore, the entity's journalism course does not satisfy the definition of an ACE course in section 195-1 of the GST Act.
Professional or trade course
To be GST-free as a professional or trade course (as defined in section 195-1 of the GST Act), a course must lead to a qualification that is an essential prerequisite for entry to, or to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.
Section 195-1 of the GST Act further provides that a qualification is an essential prerequisite where the course is a legal requirement, for example a law, regulation or industrial agreement; or the course is a requirement imposed by a professional or trade association, either nationally or on a state basis.
The entity's journalism course leads to a diploma qualification. However, this is not a qualification that is legally required for entry to, or to commence the practice of a profession or trade in Australia, nor is this qualification a requirement that is imposed by a professional or trade association, either nationally or on a state basis. Accordingly, although the entity is supplying a course that leads to a qualification, that is a diploma in journalism, this qualification is not an essential prerequisite as defined in section 195-1 of the GST Act and consequently, the entity's course does not meet the requirements of a professional or trade course (section 195-1 of the GST Act). Therefore, the entity is not making a GST-free supply of an education course under section 38-85 of the GST Act.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not GST-free under any other provision in Division 38 of the GST Act, nor is it input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies a journalism course.
Date of decision: 24 April 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
section 38-85
Division 40
section 195-1 Student Assistance Act 1973
subsection 5D(1)
Other References
Determination of Education Institutions and Courses under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 (Determination No. 1999/2)
subsection 7(1)
Schedule 1
Schedule 2
Keywords
Goods and services tax
GST free
GST education
Education courses
Professional or trade course
GST supplies & acquisitions
Taxable supply
Date of publication: 28 November 2002
ISSN: 1445-2782
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