ATO Interpretative Decision

ATO ID 2001/652

Goods and Services Tax

GST and disability support services
FOI status: may be released

This version is no longer current. Please follow this link to view the current version.


CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 disability support service provider, 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 supplies disability support services, for which it receives funding, to a client?

Decision

Yes, the entity is making a GST-free supply under section 38-40 of the GST Act when it supplies disability support services, for which it receives funding, to a client.

Facts

The entity is a disability support service provider. The entity supplies disability support services to clients with disabilities. The entity supplies most of these services at no charge to its clients. However, clients do pay a nominal charge for some of the services supplied to them by the entity.

The entity receives funding under a State or Territory law that is complementary to the Disability Services Act 1986, to supply these disability support services to clients with disabilities. The funding received by the disability support service provider is subject to GST.

The entity is registered for the goods and services tax (GST).

Reasons for Decision

A supply of services is GST-free under section 38-40 of the GST Act, if the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law in respect of the services.

The present entity receives funding under a State or Territory law that is complementary to the Disability Services Act 1986, to supply disability support services to people with disabilities.

Therefore, the entity is making a GST-free supply under section 38-40 of the GST Act, when it supplies disability support services to the client using this funding. Accordingly a payment made by the client towards the cost of these services supplied to them by the entity, is consideration for a GST-free supply to the client.

Date of decision:  18 October 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 38-40

Disability Services Act 1986
   The Act

Keywords
Goods & services tax
GST free
GST health
Section 38-40 - specialist disability services

Business Line:  GST

Date of publication:  29 November 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 18 October 2001 Original statement
  18 May 2007 Archived

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).