| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012053075946
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: GST and child care services
Question
Is GST payable on the supply of your development program?
Advice/Answers
No.
Relevant facts
You are registered for GST. You run a specific program.
The program is a coaching and education program where children of various ages are taught various skills. Programs are run regularly in various locations where parents or carers bring their children for group sessions.
Recently, a Care Provider number was issued by the Family Assistance Office (FAO) in the name of one of your employees providing the services.
You advised that as an organisation, you cannot be a 'registered carer' although individual employees of an organisation may.
The letter from FAO states that decisions about the registration of care providers are made under family assistance law. Also, care providers are required to issue receipts to families to whom they provide child care as they may be entitled to receive child care benefit.
You do not operate a child care centre and do not receive any funding from the Commonwealth for your activities.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-140.
A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.
Reasons for decision
GST is payable on a taxable supply that you make. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:
You make a taxable supply if:
you make the supply for *consideration; and
the supply is made in the course or furtherance of an *enterprise that you *carry on; and
the supply is *connected with Australia; and
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.
(* denotes a defined term in section 195-1 of the GST Act.)
In your case, you satisfy all of the conditions of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you are supplying services for consideration in the course or furtherance of your enterprise, the supply is connected with Australia and you are registered for GST.
There are no provisions in the GST Act or in any other act under which your supply of services could be input taxed. Therefore, what remains to be considered is whether, your supply of services is GST-free.
Certain child care services are GST-free under Subdivision 38-D of the GST Act.
Under section 38-140 of the GST Act, a supply is GST-free if it is a supply of child care by a registered carer within the meaning of section 3 of the A New Tax System (Family Assistance) (Administration Act) 1999 (FAA Act).
Section 3 of the FAA Act defines the term 'registered carer' to mean an individual approved as a registered carer under Division 2 of Part 8 of that Act.
Section 209 of Division 2 of Part 8 of the FAA Act states that an individual who provides care, or proposes to provide care, for a child or children may apply to be registered, provided that he or she does not operate a child care service or provide family day care.
The term 'child care' is not defined in the GST Act or in the FAA Act and therefore, it is appropriate to consider its ordinary meaning. The Macquarie Dictionary , 1997, 3rd edition, The Macquarie Library Pty Ltd NSW, defines the term 'child care' as 'professional superintendence of children' and The Australian Oxford Dictionary, 1999, Oxford University Press, Melbourne, defines 'child care' as 'the care of children, esp. in a crèche'.
You are contracted by families to supply a service in the form of the specified program. The service that you provide would include the actual caring of the child and the various activities for the duration of the program. Hence, your supply is of child care.
Your activities are undertaken in various sites rather than at an established child care centre. However, there is no requirement within the meaning of child care or in section 38-140 of the GST Act that the services must be provided in a child care centre.
You advised that as an organisation, you cannot be a 'registered carer' as defined in the FAA Act. However, you employ a person, who is a 'registered carer', to provide the services to your clients.
As the child care service is actually performed by a person who is a 'registered carer', you satisfy the requirements of section 38-140 of the GST Act. Hence, you are supplying GST-free child care to your clients when your employee performs the service.
Therefore, your supply of the program is not a taxable supply under section 9-5 of the GST Act and GST is not payable.