Issue
Is the entity, a disability support service provider, making a GST-free supply under section 38-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies disability support services, for which it receives funding, to a client?
Decision
Yes, the entity is making a GST-free supply under section 38-40 of the GST Act when it supplies disability support services, for which it receives funding, to a client.
Facts
The entity is a disability support service provider. The entity supplies disability support services to clients with disabilities. The entity supplies most of these services at no charge to its clients. However, clients do pay a nominal charge for some of the services supplied to them by the entity.
The entity receives funding under a State or Territory law that is complementary to the Disability Services Act 1986 , to supply these disability support services to clients with disabilities. The funding received by the disability support service provider is subject to GST.
The entity is registered for the goods and services tax (GST).
Reasons for Decision
A supply of services is GST-free under section 38-40 of the GST Act, if the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law in respect of the services.
The present entity receives funding under a State or Territory law that is complementary to the Disability Services Act 1986, to supply disability support services to people with disabilities.
Therefore, the entity is making a GST-free supply under section 38-40 of the GST Act, when it supplies disability support services to the client using this funding. Accordingly a payment made by the client towards the cost of these services supplied to them by the entity, is consideration for a GST-free supply to the client.