| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1012879358339
Date of advice: 16 September 2015
Ruling
Subject: Goods and services tax (GST) and child care and tutoring
Question 1
Is GST payable on your supply of before and after school child care?
Answer
No.
Question 2
Is GST payable on your supply of tutoring?
Answer
Yes.
Relevant facts and circumstances
You are registered for GST.
You supply before and after school child care and tutoring to primary school aged children.
You charge separate fees for child care and tutoring.
You operate in Australia.
You are approved to receive Child Care Benefit subsidy.
The relevant government department has approved you under the relevant provision of the relevant education and care services Act.
Your establishment is not a primary school.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
A New Tax System (Goods and Services Tax) Act 1999 section 38-85
A New Tax System (Goods and Services Tax) Act 1999 section 38-140
A New Tax System (Goods and Services Tax) Act 1999 section 38-145
A New Tax System (Goods and Services Tax) Act 1999 section 38-150
A New Tax System (Goods and Services Tax) Act 1999 section 195-1
Reasons for decisions
Question 1
Summary
Your supply of child care is GST-free because it is a supply of child care by an approved child care service.
Detailed reasoning
GST is payable on taxable supplies.
You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:
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.
(*Denotes a term defined in section 195-1 of the GST Act)
The indirect tax zone is Australia.
Your supply of child care meets the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:
• you supply the child care for consideration
• you supply the child care in the course or furtherance of an enterprise that you carry on
• these supplies are connected with Australia, and
• you are registered for GST.
There are no provisions of the GST Act under which your supplies of child care are input taxed.
Therefore, what remains to be determined is whether your supplies of child care are GST-free.
Section 38-145 of the GST Act provides that a supply of child care by an approved child care service (within the meaning of section 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 (FAA Act)) is GST-free.
The government approves child care services within the meaning of section 3 of the FAA Act. Such services are approved to receive Child Care Benefit subsidies.
You are an approved child care service for the purposes of section 38-145 of the GST Act as you are approved to receive Child Care Benefit subsidies.
Therefore, your supplies of before and after school child care are GST-free under section 38-145 of the GST Act. Hence, GST is not payable on your supplies of this child care.
Question 2
Summary
Your supply of tutoring is not a supply of childcare or a supply of an education course (as defined in the GST Act). Therefore, your supply of tutoring is not GST-free under the childcare or education provisions of the GST Act.
GST is payable on your supply of tutoring because all of the requirements of section 9-5 of the GST Act are met.
Detailed reasoning
Your supply of tutoring meets the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:
• you supply the tutoring for consideration
• you supply the tutoring in the course or furtherance of an enterprise that you carry on
• these supplies are connected with Australia, and
• you are registered for GST.
There are no provisions of the GST Act under which your supplies of tutoring are input taxed.
Therefore, what remains to be determined is whether your supplies of tutoring are GST-free.
Your supply of tutoring is not a supply of child care. Therefore, your supply of tutoring is not GST-free under section 38-140, section 38-145 or section 38-150 of the GST Act.
Section 38-85 of the GST Act provides that a supply of an education course (as defined in section 195-1 of the GST Act) is GST-free.
Section 195-1 of the GST Act provides that a course is an education course for the purposes of the GST Act if it is one of a number of types of education course. The relevant type of education course in your case is 'primary course'.
Section 195-1 of the GST Act defines 'primary course'. It states:
primary course means:
(a) a course of study or instruction that is delivered:
(i) in accordance with a primary curriculum recognised by the education
authority of the State or Territory in which the course is delivered; and
(ii) by a *school that is recognised as a primary school under the law of the State
or Territory; or
(b) any other course of study or instruction that the *Education Minister has determined is a primary course for the purposes of this Act.
Your establishment is not a primary school. Therefore, your tutoring is not a primary course under paragraph (a) of the definition of primary course in section 195-1 of the GST Act even where the tutoring is primary school course curriculum related.
No determination has been made under paragraph (b) of the definition of primary course in section 195-1 of the GST Act.
Therefore, you are not supplying a primary course for the purposes of the GST Act.
Your tutoring is not an education course of a type listed in section 195-1 of the GST Act. Therefore, your supply of tutoring is not GST-free under section 38-85 of the GST Act.
Your supplies of tutoring are not GST-free under any provisions of the GST Act.
Therefore, as all of the requirements of section 9-5 of the GST Act are met, GST is payable on your supplies of tutoring.