What affect will the
introduction of GST have upon supplies of education, training and
Division 38 in the GSTA sets out
the supplies that are GST-free. If a supply is GST-free then:
- No GST is payable on the
- An entitlement to an input tax
credit for anything acquired or imported to make the supply is not
The supply of an education course
is a GST-free supply. The ATO has issued a ruling GSTR 2000/28 for comment on
pre-school, primary and secondary education courses. Also, a final ruling, GSTR
2000/27, on the meaning of "likely to add to employment skills" as it applies to
adult and community education courses has been issued by the ATO.
Questions and Answers
- Will the provision of
first-aid kits and books issued as part of a first-aid course be considered
First aid or life saving courses
are included in the definition of an 'education course' and are therefore
GST-free. Course materials (photocopied education materials, art supplies or
ingredients in a cooking class) that are consumed or transformed in an
'education course' would be GST-free.
First-aid kits and books that are
issued as part of the course will be subject to GST. Supplies of kits and
books are taxable supplies for GST purposes and consequently GST should be
remitted on the portion of the course fee that relates to the supply of those
- To what extent will the
provision of life saving courses other than resuscitation courses be
considered GST-free? For example, the instruction of people in the use and
manoeuvring of inflatable rubber boats?
If the instruction of people to
use inflatable rubber boats was part of an overall life-saving course as
stated in the legislation then this aspect of the course would be part of a
course that is GST-free. If this type of instruction was separate to the
life-saving course then it would not be an education course and would be
- How will "Life Education"
courses that are conducted in primary and secondary schools be treated with
respect to GST. Life education exists as a complementary health and drug
education resource for schools. Clarification is sought as to:
- whether the course would be
- how a market value can be
established for these types of services?
A supply of an education course is
GST-free. The ATO has issued a draft Public Ruling GSTR 200/D? on what
constitutes an education course for the purposes of GST.
All recognised preschool, primary
school, secondary school and tertiary courses are GST-free. All courses covered
by the determination of education courses under the Student Assistance Act 1973
are GST-free. The determination also covers secondary and tertiary courses
provided they are accredited with the relevant State or Territory accreditation
authority and are not considered to be "hobby" course.
The Education Minister may
determine that any primary, secondary or tertiary course not covered by the
determination is a GST-free course.
Where a course is not an education
course that is GST-free the market value and the cost of supply are the two
tests which can be applied to an activity to decide whether it is GST-free.
Where a charity makes a supply for consideration less than 50% of the GST
inclusive market value or less than 75% of the cost of supply then that supply
will be GST-free.
- How will GST apply to a
neighbourhood centre when it offers low cost courses/programs aiming to create
opportunities for socialisation, development of life skills, or aim to
increase active participation in community life or increase health
Some of these courses are
facilitated by volunteers, others by professionals visiting from another
organisation. In all cases the neighbourhood centre will bear the cost of
administering bookings, promotion, venue maintenance, insurance, utilities
etc., and usually the cost of purchasing and maintaining equipment.
Anything supplied by a charity
(if registered for GST) is GST-free if the consideration for the supply is
less than 50% of the GST inclusive market value or less than 75% of the cost
of supply. Where the supplies are GST-free or taxable the charity is entitled
to full input tax credits for all their acquisitions that relate to these
supplies, including all the administration costs mentioned above.
- Childcare Assistance (CCA) is
paid by Centrelink to a Scheme, to be paid to the carers on behalf of the
parents. Parents pay their portion of the childcare direct to carers. The
balance is then paid by the Scheme to the carer withholding that portion
called the parent levy that is used by the scheme for administration purposes.
Will the parent levy attract GST?
Supply of child care will be
GST-free under Div 38-D if these services are provided at facilities that
receive Government funding or if the child care provider is a registered carer
for the purposes of the Childcare Rebate. Provided the childcare qualifies, the
supply is GST-free irrespective of whether the payment is from Child Care
Assistance or the parents.