GST and Professional Or Trade Courses

GST and professional or trade courses

ATO ID 2001/565

FOI status: may be released Status of this decision: Decision Current

ATO Interpretative Decision

CAUTION: This record of an ATO decision may not include a complete statement of all facts in summarising the application of the relevant provision of the law to complex circumstances. If you rely on this decision and your circumstances are materially the same as those described, and the decision is subsequently found to be incorrect, penalties will not be attracted on the missing tax. However, interest could be payable in any event depending on the circumstances of the case. If the relevant provisions, being those in force at the date of decision, have been amended or rewritten, it will be necessary to have regard to the amended or rewritten law. You may wish to obtain further advice from the ATO or from a professional adviser.

Goods and services tax

GST and professional or trade courses

Issue Is the entity, a professional association, 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 training course which leads to a qualification that is legally required to enter a particular trade or profession? Decision Yes, the entity is making a GST-free supply under section 38-85 of the GST Act when it supplies a training course which leads to a qualification that is legally required to enter a particular trade or profession. Facts The entity is a professional association which represents the interests of its members and provides advice to relevant bodies on the professional standards required in the practice of that profession. The entity is supplying a training course which leads to the gaining of a qualification that is legally required, under the relevant laws, for entry to or commencement in that profession. The entity is registered for goods and services tax (GST). 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 a professional or trade course. 'Professional or trade course' is defined in section 195-1 of the GST Act to mean a course leading to a qualification that is an essential prerequisite:  for entry to a particular profession or trade in Australia; or  to commence the practice of (but not to maintain the practice of) a profession or trade in Australia. Under the definition of 'essential prerequisite' in section 195-1 of the GST Act, a qualification is an essential prerequisite where there is a legal requirement for the qualification, for example, it is imposed by or under a law, regulation or industrial agreement; or there is a requirement imposed by a professional or trade association, either nationally or on a state basis. In this case, the training course supplied by the entity leads to the gaining of a qualification that is legally required, under the relevant laws, for entry to or commencement in that profession. As the entity is supplying a course that meets the requirements of a professional or trade course, as defined in section 195-1 of the GST Act, it is making a GST-free supply under section 38-85 of the GST Act. Date of decision: 15 August 2001 Legislative References: A New Tax System (Goods and Services Tax) Act 1999 section 38-85 section 195-1 Keywords Goods and services tax GST free GST education Education courses Date of publication: 7 November 2001 ISSN: 1445-2782 Lookup