ATO Interpretative Decision
ATO ID 2002/142
Goods and Services Tax
GST and specialist disability servicesFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 supplier of disability services, making a GST-free supply under section 38-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it coordinates a therapy program for disabled children?
Decision
No, the entity is not making a GST-free supply under section 38-40 of the GST Act when it coordinates a therapy program for disabled children. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of disability services. The entity carries out various activities in coordinating therapy programs for disabled children.
The parents of the disabled children receive funding under a State or Territory law that is complementary to the Disability Services Act 1986. The parents of the disabled children use these funds to pay the entity for its services.
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
A supply of specialist disability services is GST-free under section 38-40 of the GST Act where the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law in respect of the services.
In this case, the parents of the disabled children receive funding under a State or Territory law that is complementary to the Disability Services Act 1986. The entity, as the supplier of the disability services, then receives the payment for its services from the disabled children's parents. Therefore, the entity, the supplier of the services, is not receiving funding under the Disability Services Act 1986 or under a complementary State law or Territory law, rather the funding is received by the disabled children's parents. As such, the supply of services to disabled children is not GST-free under of section 38-40 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 neither GST-free under Division 38 of the GST Act nor 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 coordinates a therapy program for disabled children.
Date of decision: 8 November 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
section 38-40
Division 40
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Keywords
Goods & services tax
GST free
GST health
Section 38-40 - specialist disability services
GST supplies & acquisitions
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 8 November 2001 | Original statement |
| 18 May 2007 | Archived |