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Edited version of your written advice
Authorisation Number: 1051315806077
Date of advice: 4 December 2017
Ruling
Subject: GST and the National Disability Insurance Scheme
Question 1
Is GST payable on services that you supply to participants who are under the National Disability Insurance Scheme?
Answer
No, GST is not payable on services that you supply to participants who are under the NDIS.
Question 2
Is GST payable on the supply of support staff to a service provider (who in turn supplies GST-free services under section 38-38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act))?
Answer
Yes, GST is payable on the supply of support staff to a service provider (who in turn supplies GST-free services under section 38-38 of the GST Act).
Relevant facts and circumstances
You provide staffing services in the disability field.
You are registered for GST.
You have a number of disability support workers that you deploy directly to people who have a disability and have an approved NDIS plan for support services.
The services that you supply to people with disabilities (participants) meet the following requirements:
● It is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013) for whom a participant's plan is in effect under section 37 of that Act;
● It is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan;
● It is made under a written agreement, between the supplier and the participant or another person, that:
● identifies the participant; and
● states that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and
● it is of a kind that the Disability Services Minister has determined in writing.
You also supply staff to other service providers who have participants in their care. When these service providers are unable to provide their own staff to care for the participants, they request agency staff from you.
You raise invoices to these service providers for the staff that you supply. You charge them an hourly rate for these services.
Relevant legislative provisions
Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 and
Section 38-38 of the A New Tax System (Goods and Services Tax) Act 1999
Reasons for decision
Question – 1
GST is payable on taxable supplies that you make. A taxable supply is defined in section 9-5 of the GST Act as follows:
You make a taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
(c) the supply is *connected with the indirect tax zone; and
(d) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
(terms marked with asterisks (*) are defined in section 195-1 of the GST Act)
The issue here is whether the services that you supply to the participants are GST-free. The relevant section to consider here is section 38-38 of the GST Act which states the following:
A supply is GST-free if the supply:
(a) is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013) for whom a participant's plan is in effect under section 37 of that Act; and
(b) is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and
(c) is made under a written agreement, between the supplier and the participant or another person, that:
(i) identifies the participant; and
(ii) states that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and
(d) is of a kind that the *Disability Services Minister has determined in writing.
The services that you supply the participants meet the criteria outlined in section 38-38 of the GST Act. Accordingly, the services that you supply to participants who are under the NDIS are GST-free.
Question – 2
In order for a supply to be GST-free, it must be one that falls within any of the GST-free provisions mentioned in the GST Act. What you supply a third party service provider (who makes a GST-free supply to a participant under section 38-38 of the GST Act) is the supply of support staff. The supply of support staff does not come within any of the GST-free provisions of the GST Act. There are certain GST-free supplies that are GST free at every point of the supply chain (such as the supply of a GST-free medical aid). The supply of support staff is not one of them. Accordingly the supply of support staff comes with the requirements of a taxable supply and as such is taxable.
This means that you must pay GST on the price you charge the third party service provider for the supply of support staff.
If the amount that you quote the third party service provider is a GST inclusive amount this will be the price of your supply. In this scenario, GST payable is 1/11th of this amount. However, if the amount that you have quoted the third party service provider is a GST exclusive amount, this is the value of the thing that you have supplied. In this instance, the GST payable is 10% of the value of the supply.
The ATO cannot comment on pricing strategies. Rules in regards to how to quote the amount to be charged for a supply are governed by the Australian Competition and Consumer Commission. Please refer to their website or contact them for further information on how to quote/display prices.
Additional information
Price is defined in subsection 9-75(1) of the GST Act as follows:
price is the sum of:
(a) so far as the *consideration for the supply is consideration expressed as an amount of *money - the amount (without any discount for the amount of GST (if any) payable on the supply); and
(b) so far as the consideration is not consideration expressed as an amount of money - the *GST inclusive market value of that consideration.
Example:
You make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise.
The value of the supply is:
$22,000 × |
10 11 |
= $20,000 |
|
|
The GST on the supply is therefore $2,000 (i.e. 10% of $20,000).
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