Common GST categories
Education course
An education course is a structured program of learning that is GST-free when it meets the requirements of the GST law, such as school, vocational, university and certain other accredited courses.
The GST law makes many education courses GST-free. This covers courses at primary, secondary and tertiary level, many vocational education and training courses, courses leading to a recognised qualification, English as a second language courses, and some other specified courses such as special education and certain professional or trade courses. The goal is to avoid adding GST to the cost of mainstream education.
A course is generally GST-free if it falls within the categories listed in the GST Act, including that it is a course accredited by the relevant regulatory authority, such as an accredited tertiary or vocational course. Courses that are recreational or for personal interest, like a hobby class, a cooking class for fun or a short seminar, are generally taxable, unless they fall into a specific GST-free category.
The GST-free treatment can extend to things that go with the course. Course materials and administrative services that are closely connected with a GST-free course are often GST-free as well, but it depends on the nature of the supply. A separate supply, such as merchandise or optional services, may be taxable. Education providers often supply a mix of both and need to code them correctly.
An education provider that makes mostly GST-free supplies is still entitled to claim credits for GST included in its costs, such as premises, equipment and software, because GST-free supplies are not input-taxed. This is an important difference. Providers must also watch their registration obligations, because they count turnover from both GST-free and taxable supplies when working out their GST turnover.
Common misunderstandings include assuming that anything labelled training is GST-free, or that a short course delivered by a registered training organisation is always exempt. Some corporate training, workshops and coaching programs are taxable even where the provider is a training organisation. Another is thinking that the student's status decides the treatment. It is the nature of the course that matters.
If you run courses, keep accreditation details, course descriptions and enrolment records that show how each course qualifies, and review them if the provider's accreditation changes. This content is general information only, and the GST-free list is detailed, so confirm the treatment of your courses with the ATO or a registered tax professional.
Worked example
A registered training organisation delivers an accredited certificate course for $2,200 per student, which is GST-free, and also sells a non-accredited one-day workshop for $330 including GST to the public. GST included in the workshop is $330 / 11 = $30. For 10 students attending the workshop the provider reports $300 GST payable and claims credits on its venue hire.
Practical tips
- Keep accreditation evidence on file for each course you treat as GST-free.
- Review non-accredited workshops and corporate training separately, since these may be taxable even if your organisation is an education provider.
- Keep a copy of each course's accreditation details and review them whenever your registered training status changes.