Is the Education Program (Program) offered by Entity A (you) to registered psychologists a GST-free supply under section 38-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
No, the Program offered by you to registered psychologists a not a GST-free supply under section 38-85 GST Act? This ruling applies for the following period : 1 July 20XX till quarter ending 30 June 20XX The scheme commences on: 1 July 20XX
The description of the scheme is based on information provided by the applicant in the following documents, which are to be read in conjunction with the facts as set out below: • 'Offer of Enrolment' form. • 'Acceptance of Offer of Enrolment Form'. • the Program application declaration form • Application for area of practice endorsement form • the Program details/syllabus for the current year together with the Program competencies map • Tax invoice issued by you to an enrolled psychologist Entity A (you) offers the Program to psychologists (General Psychologists) wishing to advance in the profession and become clinical psychologists. The requirements to become a clinical psychologist have been developed by the national regulator known as the Psychology Board of Australia (the Board). The Board requires both additional post-graduate university training and a package of training experiences post-university that are called a "Registrar Program".
Information regarding the Registrar Program is set out in the Boards website which explains that the Registrar Program is a period of supervised practice in one of the nine approved areas of practice which follows the completion of an approved postgraduate qualification in the same area of practice. It enables a psychologist to develop the competencies required of a psychologist endorsed in the area of practice. The Registrar Program consists of three components: • psychological practice • supervision with a Board-approved supervisor who holds endorsement in that area of practice, and • continuing professional development (CPD). You have developed a package of training(s) (the Program), which is a course that includes the period of supervised practice to meet the requirements of a "Registrar Program". However, the Program is not endorsed by the Board as a Registrar Program. To deliver the Program you may employ supervisors, which includes Board approved supervisors. To enrol in the Program the General Phycologist completes a form titled 'Offer of Enrolment' and the 'Acceptance of Offer of Enrolment Form'.
The Program, which you supply to General Psychologists, consists of three components as follows: • Continuous professional development • Individual Supervision: Delivered in real time either face to face or in person. • Group Supervision: Delivered in real time face to face or in person. Upon completing the Program the General Psychologist may be able complete the form being that "Application for area of practice endorsement". This form is submitted to the Board for the General Psychologist to be endorsed as a clinical psychologist if eligible. The 'Application for area endorsement form' contains the General Psychologists personal details together with the details of the Board approved supervisors. You are registered for GST.
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 section 38-85 A New Tax System (Goods and Services Tax) Act 1999 section 195-1
Section 38-85 of the GST Act provides that a supply is GST-free if it is either: (a) a supply of 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. The term 'education course' is defined in section 195-1 of the GST Act, and paragraph (j) of the definition of education course includes a 'professional or trade course'. The term 'professional or trade course' is also defined in section 195-1 as: 'a course leading to a qualification that is an essential prerequisite: (a) for entry to a particular profession or trade in Australia; or (b) to commence the practice of (but not to maintain the practice of) a profession or trade in Australia.' Goods and Services Tax Ruling GSTR 2003/1, Goods and services tax: supplies that are GST-free as professional or trade courses (GSTR 2003/1) explains the meaning of 'professional or trade course' in section 195-1 of the (GST Act). The supply of a course that meets the requirements of the definition is an education course that is GST-free under paragraph 38-85(a).
You have submitted that the supply of the Program is a GST-free supply as it has the characteristics of a professional or trade course in GSTR 2003/1. We do not agree with this submission. Relevantly paragraph 9 of GST 2003/1 states: 9. For the purposes of the definition of a 'professional or trade course' the term 'essential prerequisite' is defined in section 195-1 in the following terms: 'a qualification is an essential prerequisite in relation to the entry to, or the commencement of the practice of, a particular profession or trade if the qualification is imposed: (a) by or under an industrial instrument; or (b) if there is no industrial instrument for that profession or trade but there is a professional or trade association that has uniform national requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association; or (c) if neither paragraph (a) nor (b) applies but there is a professional or trade association in a State or Territory that has requirements relating to the entry to, or the commencement of the practice of, the profession or trade concerned - by that association.'
Paragraph 16 in GSTR 2003/1 provides that if a person cannot enter, or commence practising in, a profession or trade without a particular qualification, a course that leads to that qualification is a professional or trade course. Paragraph 22 in GSTR 2003/1 explains that whether you supply a course is a question of fact. In the context of the definition of a 'professional or trade course' in section 195-1, a course is a program of systematic and interactive instruction or training, for the acquisition of particular skills or knowledge. Indicators of a course include, but are not limited to: • delivery of educational instruction through an instructor or teacher; • ongoing support and guidance, for example, being available to answer questions; • assessment of the individual's progress; • monitoring or supervision; • provision of feedback concerning the individual; and • assessment of competency or satisfactory completion at the end of the program of instruction. Further paragraph 29 in GSTR 2003/1 states:
29. A program of subjects that you supply as one course may be a mixed supply. The supply is a mixed supply if it comprises subjects that are separately identifiable as a professional or trade course, and other subjects or things, that are taxable. You will need to apportion the consideration for a mixed supply between the taxable and non-taxable parts to find the consideration for the taxable part. Qualification The next step is to consider whether the Program provided by you leads to a qualification. Paragraph 40 of GSTR 2003/1 states: 40. In some circumstances, you may supply a course and on its successful completion, another party may supply a qualification that is an essential prerequisite. It does not matter that you are not responsible for the assessment and the issue of the qualification. The course leads to a qualification. 'Qualification' is not defined in the GST Act and the term therefore takes its ordinary meaning. The Macquarie Dictionary defines 'qualification' as 'a quality, accomplishment, etc., which fits for some function, office, etc. Paragraphs 43 to 45 of GSTR 2003/1 explain the meaning of qualification:
43. A qualification is normally acquired through study or experience and equips a person to perform a particular task or function. In the context of the definition of a professional or trade course in section 195-1, a qualification is an attribute or quality that is acquired after undertaking a course. It is evidenced by some document that indicates successful completion of the course. The document would normally be accepted by a Commonwealth, State or Territory authority, or a professional or trade association, or an employer as suitable evidence that a person has successfully completed the relevant course. 44. A relevant authority or professional or trade association may issue a licence or a certificate that qualifies a person to do certain things. For example, a licence to drive a particular class of heavy road vehicle, or a practising certificate. Where this is the case, the certificate or licence is a qualification for the purposes of the section 195-1 definition of a professional or trade course. 45. Documents that are qualifications or that provide evidence of a qualification include: • a statement of satisfactory completion;
• a certificate (including a degree or diploma); • a licence; or • an accreditation. Essential Prerequisite Paragraph 48 of GSTR 2003/1 provides that a qualification is an essential prerequisite if it is mandatory for a person to have the qualification before he or she can enter into, or commence the practice of, a particular profession or trade. This necessarily requires the imposition of penalties or sanctions if a person enters into, or commences the practice of, the profession or trade without the relevant qualification. Lastly paragraphs 98 and 99 of GSTR 2003/1 provide an explanation in regard to maintaining the practice of a profession or trade and state: 98. The exclusion in paragraph (b) of the definition of a professional or trade course in section 195-1of the GST Act ensures that a course which leads to a qualification that is an essential prerequisite to maintaining the practice of a profession or trade, is not a professional or trade course. 99. Maintaining the practice of a profession or trade includes such things as: • undertaking continuing professional development, • re-licencing, • re-accreditation,
• renewal of annual practicing certificates, and • refresher courses Application to your circumstances In this case the documents provided set out the course detail, packaging and pricing for the 'CPD and supervision options' offered to psychologists. It shows that there are three different packages offered by you to psychologists, each of which consists of CPD. The CPD can be combined with the addition of 'group supervision' and 'individual supervision' to achieve the registrar requirement for clinical endorsement. The Program course details themselves, do not separately identify the supervisory activities. The 'Acceptance of Offer of Enrolment Form' and application declaration form each provide that "Fees" means the Fees charged in accordance with the Schedule of Fees in consideration for the acceptance of the Trainee's enrolment and participation in Program. Further the sample tax invoice shows the monthly consideration payable for the supply. Given the documents submitted we do not consider the Program is a mixed supply.
Based on the facts provided we accept that the Program is a supply of a 'course' in accordance with the principles in GSTR 2003/1. However, the course provided to the General Psychologist is not considered as an essential prerequisite to entry to, or the commencement of the practice of, a particular profession or trade (i.e. the clinical psychology). Relevantly the Program you provide is not recognised by the Board such that the Program itself leads to the relevant qualification necessary for endorsement as a clinical psychologist. Further, consistent with paragraph 98 and 99 of GSTR 2003/1, the character of Program is CPD.
Consequently, it is our view that the Program supplied to the fully registered psychologists (the General Psychologist) is part of their continuing professional development. The provision of the supervision services as part of the Program will fall within the exclusion contained in paragraph (b) of the definition of a professional or trade course in section 195-1 of the GST Act. On this basis the supply of the Program to fully registered psychologists as part of their continuing professional development is not an education course which is GST-free under section 38-85 of the GST Act.