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Edited version of your private ruling
Authorisation Number: 1012549073016
Ruling
Subject: GST and child care services
Question 1
Is your supply of child care services GST-free?
Answer
Yes.
Question 2
Are you entitled to claim the GST in the price of your acquisitions used in carrying on your child care enterprise?
Answer
Yes.
Relevant facts and circumstances
· You are registered for goods and services tax (GST).
· You have been approved as a child care service within the meaning of section 3 of the A New Tax System (Family Assistance)(Administration) Act 1999.
· You make acquisitions that are used in carrying on your child care enterprise.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999:
Section 11-5
Section 11-15
Section 11-20
Section 38-145.
A New Tax System (Family Assistance)(Administration) Act 1999
Section 3.
Reasons for decision
1 Is your supply of child care services GST-free?
Under section 38-145 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a supply of child care services is GST-free if the supplier of the services is an approved child care service within the meaning of section 3 of the FAA.
In your case, you are such an approved child care service and consequently, your supply of child care services is GST-free under this legislative provision.
2 Are you entitled to claim the GST in the price of your acquisitions used in carrying on your child care enterprise?
Section 11-20 provides that you are entitled to claim input tax credits (also known as GST credits) on your creditable acquisitions.
Section 11-5 of the GST Act provides the following criteria as to what constitutes a creditable acquisition:
· you acquire anything solely or partly for a creditable purpose
· the supply of the thing to you is a taxable supply
· you provide, or are liable to provide, consideration for the supply, and
· you are registered for GST.
Further to this, section 11-15 of the GST Act provides that you acquire something for a creditable purpose to the extent you acquire it in carrying on your enterprise. This legislative provision does not exclude your GST-free child care services.
Given this, you would be entitled to claim GST credits in relation to your acquisitions made in relation to your child care enterprise provided the supply to you is taxable.
Note that you must hold a tax invoice before you can claim the GST on an acquisition where the price of the acquisition exceeds $82.50 (GST inclusive).
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