Private ruling: Goods and services tax (GST), child care services and GST turnover
Date of advice: 1 June 2020
Published: July 2020
Ruling period: 1 July 20XX - 30 June 20XX

Ruling: Q1: Is your supply of child minding services GST-free under Subdivision 38-D of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. Your supply of child minding services is not GST-free under Subdivision 38-D of the GST Act. If you are registered, or required to be registered, for GST your supplies will be taxable supplies as all of the requirements of section 9-5 will be met. | Q2: When calculating your GST turnover for the purposes of sections 188-15 and 188-20 of the GST Act, do you include amounts received as consideration for the provision of your child minding services? | A2: Yes. The amounts that you receive as consideration for your child minding services should be included when calculating your current GST turnover and projected GST turnover for the purposes of sections 188-15 and 188-20 of the GST Act.

Relevant facts and circumstances: You are not registered for GST. You provide two services, being child minding services and administrative and clerical work. You make your supply of child minding services in the course of an enterprise that you carry on. You are seeking this private binding ruling with respect to the GST treatment of your child minding services only. You provide the child minding services at the houses of the children that you are looking after. During the provision of your child minding services, you take the children on outings, and do some learning with the children at home. The parents of the children provide food for the children. You do not live with the families that you provide child minding services to. Your service is not an "approved child care service" within the meaning of section 3 of A New Tax System (Family Assistance) (Administration) Act 1999 . You are not eligible for Commonwealth funding in respect of your services.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | section 38-145 | section 38-150 | section 38-155 | section 188-15 | section 188-20

Reasons for decision: Detailed Reasoning - Taxable supplies: Goods and services tax (GST) is payable on taxable supplies. Section 9-5 states: You make a taxable supply if: (a) you make a 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 Australia; 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. In your case, you satisfy paragraphs (a), (b) and (c) of section 9-5. That is, you make a supply of child minding services for consideration, the supply is made in the course or furtherance of an enterprise that you carry on, and the supply is connected with Australia as the services are performed in Australia. If you become registered, or required to be registered for GST, you will satisfy paragraph 9-5(d). However, your supply will not be a taxable supply to the extent that it is GST-free or input taxed. There are no provisions in the GST Act that makes your supply input taxed. Therefore, what remains to be considered is if your supply is GST-free. In your case, of relevance is Subdivision 38-D. | Detailed Reasoning - Subdivision 38-D: Subdivision 38-D of the GST Act contains various provisions that provide that certain child care services are GST-free. Section 38-145 provides that a supply is GST-free if: (a) it is 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) ; or (b) it is a supply of an excursion that is directly related to a supply of child care covered by paragraph (a). "Approved child care service" is defined in section 3 of A New Tax System (Family Assistance) (Administration) Act 1999) to have the meaning given by section 194G of that Act. Section 194G provides: (1) A child care service is an approved child care service if an approved provider is approved in respect of the service under this Division and that approval is in effect. ... Section 3 of that Act provides the definition of "approved provider": "approved provider" means a provider for which an approval is in effect under Division 1 of Part 8 (and does not include a provider whose approval as a provider under that Part is suspended). You have advised that your service is not an "approved child care service" within the meaning of section 3 of A New Tax System (Family Assistance) (Administration) Act 1999 . Consequently, your supply is a not GST-free under section 38-145 of the GST Act. Section 38-150 provides that the following supply of 'other child care' is GST-free: (1) A supply is GST-free if it is a supply of child care specified in a determination made under subsection (2). (2) The *Child Care Minister may, by legislative instrument, determine kinds of child care for the purposes of subsection (1). A kind of child care may only be included in a determination if the supplier of the care is eligible for Commonwealth funding in respect of the kind of care. The Minister for Education and Training has made a determination under subsection 38-150(2), titled GST-free Supply (Child Care) Determination 2017 (the Determination). The Determination provides that the following kinds of child care are GST-free under subsection 38-150(2) where the supplier is eligible for Commonwealth funding in respect of the care: · in-home care provided by a service that does not hold approval under the family assistance law under the auspices of the Interim Home Based Carer Subsidy Programme of the Commonwealth; and · centre-based child care provided by a service that does not hold approval the family assistance law under the auspice of the Budget Based Funded program of the Commonwealth. You have advised that you do not receive Commonwealth funding with respect of your services. Further, your care is not of the kind specified under the Determination. Consequently, your supply is not GST-free under section 38-150 of the GST Act. Section 38-155 provides that a supply directly related to child care, which is GST-free under sections 38-145 and 38-150, is also GST-free in the following circumstances: A supply is GST-free if it is a supply that is directly related to a supply of child care that is: (a) GST-free because of section 38-145 or 38-150; and (b) Supplied by, or on behalf of, the supplier of the child care. Hence, your supply of child minding services is not GST-free under Subdivision 38-D of the GST Act. Your supply of child minding services is not GST free under any other provision of the GST Act or of another Act. Consequently, if you become registered, or required to be registered for GST, all of the requirements of section 9-5 will be met and your supplies will be taxable supplies. | Summary: The amounts that you receive as consideration for your child minding services should be included when calculating your current GST turnover and projected GST turnover for the purposes of sections 188-15 and 188-20 of the GST Act. | Detailed Reasoning - Calculation of GST turnover: You are required to calculate your GST turnover on a current and projected basis. Sections 188 - 15 provides that your current GST turnover is the sum of the value of all the supplies that you have made, or are likely to make, during the 12 month period ending at the end of that month. Section 188 - 20 provides that your projected GST turnover is the sum of the values of all the supplies that you have made, or are likely to make, during that month and the next 11 months. When calculating your current GST turnover and your projected GST turnover, you are to exclude: · supplies that are input taxed; or · supplies that are not for consideration and are not taxable supplies under section 72-5; or · supplies that are not made in connection with an enterprise that you carry on. Subsections 188 - 15(3) and 118 - 20(3) further provide that the following supplies should be disregarded when calculating your current GST turnover and project GST turnover (respectively): · any supply that is not connected with the indirect tax zone; and · any supply that is connected with the indirect tax zone because of paragraph 9-25(5)(c), unless: - the supply is made to an Australian consumer; and - the supply is not GST-free; and - the thing to be acquired under the right or option referred to in that paragraph is not goods or real property; and · any GST-free supply made by a non-resident that does not make the supply through an enterprise that the non-resident carries on in the indirect tax zone. As you child minding services are not supplies that are excluded or disregarded from the calculation of your current GST turnover and your project GST turnover by sections 118-15 and 118-20, the amounts that you receive as consideration for these supplies should be included when calculating your current GST turnover and projected GST turnover. For the purpose of determining if your GST turnover meets the registration turnover threshold of $75,000, you include the fees from both the child minding services and the administrative and clerical services.