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Ruling

Subject: GST and supply of services

Question:

What is the goods and services (GST) status of the following services that are supplied by the Australian entity to people living with a disability in Australia:

Home help with house cleaning/chores/ironing/washing/shopping

Personal care

Home, garden and lawn maintenance

Home modifications

Provision/preparation of food

Respite care

Transport to and from shopping, social outings and medical appointments

Assessment of the person's care needs

Referral to other community care services

Training in the use of aids and appliances

Community occupational therapy services

Individual care planning and case management

Linen services

Counselling

Medication management

Provision and monitoring of personal alert systems

Continence management

Assessment of the carer's care needs

Carer support

Social support

Care coordination

Advice

Based on the information received, some of the above supplies of services made by the Australian entity are GST-free under subsection 38-30(3) of the GST Act and others are taxable supplies under section 9-5 of the GST Act (refer to the reasoning for detailed information of the GST status of each supply).

Where the Australian entity provides a package of services consisting of a GST-free and a taxable component, the supply of this package is a mixed supply. In this instance, the Australian entity will need to apportion the consideration between the component that is taxable and the component that is GST-free.

Relevant facts

You are a not for profit company located in Australia and registered for GST. You provide a range of services to support people with a disability in Australia which include:

· Home help with house cleaning/chores/ironing/washing/shopping

· Personal care

· Home, garden and lawn maintenance

· Home modifications

· Provision/preparation of food

· Respite care

· Transport to and from shopping, social outings and medical appointments

· Assessment of the person's care needs

· Referral to other community care services

· Training in the use of aids and appliances

· Community occupational therapy services

· Individual care planning and case management

· Linen services

· Counselling

· Medication management

· Provision and monitoring of personal alert systems

· Continence management

· Assessment of the carer's care needs

· Carer support

· Social support

· Care coordination

You offer these services at full cost recovery with a small profit margin. You do not receive any funding or subsidy from the government when you make these supplies. The services can be provided either as a single service, that is domestic assistance, or as a package of services, that is domestic assistance and personal care. You will enter into an agreement with the client for the supply of any of these services.

You will not provide any accommodation with the services. The clients are living in private accommodation that is non government funded premises.

Your supply of each service is not less than 50% of the GST inclusive market value of the supply. Further the supply of each service is not less than 75% of the consideration that you provided or is liable to provide for acquiring the thing supplied. These services are not covered by Medicare and are not performed by a recognised professional of a kind listed in subsection 38-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

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 Subsection 38-10(1);

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-25(3);

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-30(3); and

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-250.

Reasons for decisions

GST is payable on a taxable supply. Under section 9-5 of the GST Act, you make a taxable supply if:

· you make the supply for consideration;

· the supply is made in the course or furtherance of an enterprise that you carry on;

· the supply is connected with Australia; and

· you are registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Based on the information received, you will satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act when supplying the services as:

· you make the supplies for consideration;

· the supplies are made in the course of an enterprise that you carry on;

· the supplies are connected with Australia as they are done through an enterprise that you carry on in Australia; and

· you are registered for GST.


However, the supplies of these services will be taxable supplies to the extent that they are not GST-free or input taxed. There is no provision under the GST Act that will make these supplies of services input taxed.

As the supplies are made to people with a disability, the next step is to examine whether these supplies are GST-free and therefore excluded from being taxable supplies.

GST-free supplies

Division 38 of the GST Act sets out the supplies that are GST-free. if a supply is GST-free then no GST is payable on the supply and an entitlement to an input tax credit for anything acquired or imported to make the supply is not affected.

Relevant to your supplies of services are subsections 38-10(1), 38-25(3), 38-30(3) and section 38-250 of the GST Act. We will now consider whether any of the supplies of services satisfies all the requirements in any of the relevant section and subsections.

Subsection 38-10(1) of the GST Act

Subsection 38-10(1) of the GST Act is about supply of other health services. For subsection 38-10(1) of the GST Act to apply the service:

· must be of a kind specified in the table in subsection 38-10(1) of the GST Act; and

· the supplier must be a recognised professional (as defined in section 195-1 of the GST Act), in relation to the supply of services of that kind; and

· the supply must be generally accepted in the relevant profession as being necessary for the appropriate treatment of the recipient of the supply (as defined in section 195-1 of the GST Act).

You have advised that none of the services they supply are performed by a recognised professional of a kind listed in subsection 38-10(1) of the GST Act. Accordingly, the supply of the services is not GST-free under subsection 38-10(1) of the GST Act.

Subsection 38-25(3) of the GST Act

Section 38-25 of the GST Act provides for the supply of residential care services made by a government funded and non-government funded supplier to be GST-free.

The supply of residential care services to an aged or disabled person by a non-government funded supplier is GST-free under subsection 38-25(3) of the GST Act where:

the services are supplied in a residential setting;

· the Aged Care Minister has determined in writing that the services are of a kind covered by Schedule 1 to the Quality of Care Principles; and

· the services include, and are only provided to people who require, the services set out in:

· item 2.1 (daily living activities assistance) of part 2 of that Schedule (Item 2.1) ; or

· item 3.8 (nursing services) of part 3 of that Schedule (Item 3.8).

For the purposes of paragraph 38-25(3)(b) of the GST Act, the Aged Care Minister has made a determination 'GST-free Supply (Residential Care - Non-Government Funded Supplier) Determination 2000'. This determination duplicates the services listed in Schedule 1 of the Quality of Care Principles and provides that these services are of a kind covered by Schedule 1 to the Quality of Care Principles if supplied in the circumstances mentioned in the determination.

The circumstances determined by the Aged Care Minister are:

· The resident has a continuing need for the services mentioned in Item 2.1 or Item 3.8; and

· The services are supplied, under a written agreement with the supplier, as a package made up of:

· the services mentioned in Item 2.1 or Item 3.8;

· other services mentioned in Schedule 1 to the Quality of Care Principles that are needed by the resident, and

· accommodation, and

· The charges for services and for accommodation are payable to the same entity.

From the facts given, you do not supply accommodation with your services. Accordingly, the supply of services will not be GST-free under subsection 38-25(3) of the GST Act.

Subsection 38-30(3) of the GST Act

Section 38-30 of the GST Act provides for the supply of community care services to be GST-free.

The supply of community care services to an aged or disabled person, by a non-government funded supplier is GST-free under subsection 38-30(3) of the GST Act to the extent that the services are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles (Item 2.1).

Item 2.1 appears as follows:

Part 2          Care and services - to be provided for all residents who need them

Services that are not covered by Item 2.1 include:

· Assistance with housework;

· Assistance with gardening;

· Meal preparation services;

· Grocery shopping for individuals;

· Monitoring medication;

· Rehabilitation services;

· Assistance with writing cheques, letters and so on;

· Advocacy services;

· Provision of social and community activities such as providing companionship, craft and reading activities to individuals, and

· Driving individuals to and from appointment.

We will now consider whether your supplies of services are listed in Item 2.1 or not and their GST status.

Summary

Some of your services are listed in Item 2.1 and the supply of these services is GST-free under subsection 38-30(3) of the GST Act.

Where the services are not listed in Item 2.1 the supply of these services is a taxable supply under section 9-5 of the GST Act.

Further, where you provide a package of care services consisting of some Item 2.1 services and other services, the supply is a mixed supply comprising a separately identifiable part that is the supply of community care (GST-free) and a part that is taxable. In this instance, you will need to apportion the consideration between the component that is taxable and the component that is GST-free.

Goods and Services Tax Ruling GSTR 2001/8 may be of assistance as it provides guidance on how to apportion the consideration between the GST-free and taxable parts of a mixed supply.

Section 38-250 of the GST Act

Under section 38-250 of the GST Act anything supplied by a charity, a gift deductible entity or a government entity is GST-free if the payment or consideration for the supply is either:

less than 50% of the GST inclusive market value - this does not include accommodation which is less than 75% of the GST inclusive market value (subsection 38-250(1) of the GST Act) or

less than 75% of the 'cost of supply' (subsection 38-250(2) of the GST Act).

From the facts given, section 38-250 of the GST Act is not applicable to the supply of these services as:

· the supply of each service is not less than 50% of the GST inclusive market value; and

· the supply of each service is not less than 75% of the consideration that ADSSI provides or is liable to provide for acquiring the thing supplied.

Summary

Some of the services you make are listed in Item 2.1 and the supply of these services is GST-free under subsection 38-30(3) of the GST Act.

Where the services are not listed in item 2.1 the supply of these services is a taxable supply under section 9-5 of the GST Act.

Further, where you provide a package of care services consisting of some Item 2.1 services and other services, the supply is a mixed supply comprising a separately identifiable part that is the supply of community care (GST-free) and a part that is taxable. In this instance, you will need to apportion the consideration between the component that is taxable and the component that is GST-free.