1 Are you, as a registered NDIS provider, entitled to claim input tax credits under section 11-20 for construction costs incurred in developing the dwelling, given that the dwelling will be used as Specialist Disability Accommodation (SDA) leased to an NDIS participant?
1 You are entitled to claim input tax credits for construction costs if you are registered, or required to be registered, for GST. As you are not required to be registered and are not currently registered for GST, you are not yet entitled to claim input tax credits. This ruling applies for the following periods : 1 July 20XX to 30 June 20XX The scheme commences on: The date this ruling is issued.
You have an Australian Business Number (ABN) but are not registered for GST. In 20YY, you purchased the property, which was vacant land and constructed an NDIS SDA single-story dwelling on the property. The property will be leased to an NDIS participant who has eligible SDA funding in their plan. During the construction of the property, you incurred GST on bricks and laying labour, a fire sprinkler system, concrete slab, roofing, plastering, cabinetry, plumbing, electrical, paving, tiling, air-conditioning, painting, aluminium windows and doors. On DD MM 20YY, NDIS Quality and Safeguards Commission issued you a Certificate of Registration pursuant to section 73E(4) of the National Disability Insurance Scheme Act 2013 (NDIS Act) authorising you to provide the classes of supports of SDA under a participant's plan from DD MM 20YY until DD MM 20YY. Your NDIS provider registration number is x-xxxxxxx. On DD MM 20YY, the property was assessed by an NDIS SDA Accredited Assessor who confirmed that the property complies with the requirements listed in NDIS SDA Design Standard Edition 1.1.
National Disability Insurance Agency (NDIA) has enrolled the property as an SDA dwelling to provide SDA supports. The property has three bedrooms: one for the NDIS participant, one for on-site overnight accommodation (OOA), and one for equipment and storage. At the time of enrolment, you recorded that GST was paid and GST credits were to be claimed. This was based on advice you received from a NDIS SDA Team Leader that you should be able to claim input tax credits back and therefore you applied for the lower funded amount. You have entered into a written Services Agreement with the representative of the NDIS participant, who is acting on the participant's behalf, to deliver SDA supports. The earliest tax invoice you hold for claiming GST credits is DD MM 20YY. To date, you have not lodged any claims for SDA payments under the participant's plan. You provided the participants original SDA Eligibility Approval in 201YY, which shows the SDA support that can be accessed. You stated that SDA allocated in the current plan sits in the backend of the system and now only shows when activated. This is because of the new PACE portal system for NDIS participants.
You provided an email from National Disability Insurance Agency (NDIA) dated DD MM 20YY, advising that they have determined the participant to be eligible for SDA. NDIA stated the highest value, specifying the appropriate SDA type and location, and the features to be funded. You also provided an email from the participant's planner from NDIA dated DD MM 20YY, advising the design category the participant is approved for is Improved Liveability and based on the information provided to the NDIA, the participant did not meet the criteria for Robust design so to look at Improved Liveability options. The email also noted that the SDA figure they had was X years old (as of 20YY). The participant's planner advised that they recalculated this figure and the new SDA amount available has increased from $XX to $XX and has added this calculation to the participant's documents on their NDIS file. The participant's planner also advised that, if required, the ILO/SDA funding could be reassessed.
You provided us a copy of the participants plan that commenced on DD MM 20YY, and scheduled to be reviewed by DD MM 20YY, which states that the participant's SDA supports is one of the reasonable and necessary supports in the participant's plan. In your email sent on DD MM 20YY, you explained that SDA "sitting in the backend" of a participant's plan refers to an approved SDA allocation that has not been activated yet. With the new PACE plans, this will not show in the funds allocated section in the digital or printed plans as it did in previous years. The email also noted that SDA funding, once approved, is permanently attached to the participant and is released upon processing of a quote. A quote has been submitted to NDIS to release allocated approved SDA funds on DD MM 20YY, however there is backlog in processing time. You have had confirmation from the participant's Specialist Support Coordinator that the quote has been received and is awaiting processing. You further clarified that the participant's funding has been rolled over for a further XX months as from DD MM 20YY, with SDA funding remains unchanged.
A New Tax System (Goods and Service Tax) Act 1999 section 9-20 A New Tax System (Goods and Service Tax) Act 1999 section 9-30 A New Tax System (Goods and Service Tax) Act 1999 section 11-5 A New Tax System (Goods and Service Tax) Act 1999 section 11-15 A New Tax System (Goods and Service Tax) Act 1999 section 11-20 A New Tax System (Goods and Service Tax) Act 1999 section 23-5 A New Tax System (Goods and Service Tax) Act 1999 section 25-10 A New Tax System (Goods and Service Tax) Act 1999 section 29-10 A New Tax System (Goods and Service Tax) Act 1999 section 29-70 A New Tax System (Goods and Service Tax) Act 1999 section 37 A New Tax System (Goods and Service Tax) Act 1999 section 38-38 A New Tax System (Goods and Service Tax) Act 1999 subsection 177-10(5) A New Tax System (Goods and Serv
Section 11-20 provides that you are entitled to the input tax credits for any creditable acquisition you make. Section 11-5 provides that you make a creditable acquisition if: (a) you acquire anything solely or partly for a creditable purpose; and (b) the supply of the thing to you is a taxable supply; and (c) you provide, or are liable to provide, consideration for the supply, and (d) you are registered, or required to be registered. In this case, you meet the requirements of section 11-5(b) and 11-5(d) as the supply of the goods acquired to construct the SDA dwelling to you were a taxable supply and you provided consideration for the supply of those goods. We now need to determine whether the goods acquired for constructing the SDA dwelling were for a creditable purpose under section 11-5(a) and as you are not currently registered, whether you are required to be registered under section 11-5(d). The meaning of creditable purpose is set out in section 11-15 which states: (1) you acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise
(2) However, you do not acquire the thing for a creditable purpose to the extent that: (a) the acquisition relates to making supplies that would be *input taxed; or (b) the acquisition is of a private or domestic nature. An enterprise is broadly defined in section 9-20 to be an activity or a series of activities done: (a) in the form of a business; or (b) in the form of an adventure or concern in the nature of trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or Section 195-1 states that the phrase 'carrying on' in the context of an enterprise includes 'doing anything in the course of the commencement or termination of the enterprise'. In this case, you purchased vacant land at xx xx (the property) and constructed a specialist disability accommodation dwelling on the property. Once construction was completed, you registered with NDIS to provide supports of SDA to an NDIS participant (participant) whose plan includes SDA funding. The dwelling was enrolled with NDIA on DD MM 20YY, and you commenced leasing the residential premises to participant on DD MM 20YY.
We consider that your supply of leasing the SDA dwelling to provide SDA supports is in the course or furtherance of an enterprise that you are carrying on. Accordingly, paragraph 11-15(1) is satisfied. Generally, supplies of residential premises by way of lease are input taxed supplies pursuant to section 40-35 of the GST Act. However, subsection 9-30(3) provides that to the extent that a supply would, apart from this subsection, be both GST-free and input taxed: • the supply is GST-free and not input taxed, unless the provision under which it is input taxed requires the supplier to have chosen for its supplies of that kind to be input taxed, or • the supply is input taxed and not GST-free, if that provision requires the supplier to have so chosen. Therefore, we need to determine whether your supply of leasing the SDA dwelling to a NDIS participant is GST-free under section 38-38. Subdivision 38-B sets out the supplies relating to health that are GST-free where certain requirements are satisfied. Section 38-38 provides that a supply of a disability support to a NDIS participant will be GST-free if the supply:
(a) is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013 ) for whom a participant's plan is in effect under section 37 of that Act; and (b) is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and (c) is made under a written agreement, between the supplier and the participant or another person, that: (i) identifies the participant; and (ii) states that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and (d) is of a kind that the *Disability Services Minister has determined in writing. All of these requirements must be satisfied for a supply to be GST-free. Supply to a participant with a plan in effect To satisfy paragraph 38-38(a), the supply must be made to a NDIS participant who has a plan in effect under section 37 of the National Disability Insurance Scheme Act 2013 (NDIS Act). Under section 37(1) provides that a participant's plan comes into effect when the CEO has:
(a) received from the participant's statement of goals and aspirations from the participant; and (b) approved the statement of participant supports In this case, you have provided a copy of the NDIS participants' plan, which commenced on DD MM 20YY and was scheduled for review on DD MM 20YY. This confirms that the participant has a plan in effect. Accordingly, your supply of SDA supports is made to an NDIS participant who has a NDIS plan in effect, satisfying paragraph 38-38(a). A supply of a reasonable and necessary support To satisfy paragraph 38-38(b), the supply must be of a reasonable and necessary support specified in the participant's plan under subsection 33(2) of the NDIS Act.
You have provided a copy of the NDIS participant's plan, which confirming eligibility for SDA funding as a reasonable and necessary support. An NDIS participant cannot receive SDA unless deemed eligible by the NDIS CEO. Once eligibility is confirmed, the CEO determines the supports that are reasonable and necessary, including attributes such as Building Type, Design Category, and Location. These attributes affect the maximum SDA funding amount but do not constitute the support itself - the support is the provision of SDA accommodation. For the purposes of paragraph 38-38(b), the participant's eligibility for SDA is stated as one of the reasonable and necessary capital supports in their plan. This support becomes active once a quote is obtained and approved. Once approved, SDA funding will be incorporated into the participant's plan. Accordingly, paragraph 38-38(b) will be satisfied one the quote is approved. Made under a written agreement between the supplier and participant To satisfy paragraph 38-38(c), you must have a written agreement with the participant or their representative that: • identifies the participant; and
• states that the supply is of a reasonable and necessary support specified in statement of supports in the participant's plan. Additionally, subsection 36(1) of the SDA Rules requires a registered SDA provider to have a written service agreement with the NDIS participant. In this case: • You have entered into a written Service Agreement with the NDIS participants representative for the provision of SDA supports • The Services Agreement identifies the name of the participant and their representative and specifies that you will supply SDA to the participant. • You have also entered into Residential Tenancy Agreement with the participant. Therefore, paragraph 38-38(c) is satisfied. A supply of a kind covered by the Disability Services Minister's Determination Paragraph 38-38(d) requires the supply to be of a kind determined in writing by the Disability Services Ministers. The A New Tax System (Goods and Services Tax) (GST-free Supply - National Disability Insurance Scheme Supports) Determination 2021 (NDIS Determination) was made under subsection 177-10(5) for the purposes of paragraph 38-38(d).
Subsection 6(1) of the NDIS Determination provides that a supply of a kind listed in the table under that subsection will satisfy paragraph 38-38(d). Item 1 of the table under subsection 6(1) of the NDIS Determination (Item 1) lists: Specialist disability accommodation ( within the meaning of the National Disability Insurance Scheme rules ) and accommodation/tenancy assistance (emphasis added) 'Specialist disability accommodation' is not defined under the NDIS Determination or the GST Act. The Explanatory Statement to the New Tax System (Goods and Services Tax) (GST-free Supply - National Disability Insurance Scheme Supports) Determination 2021 provides: The SDA Rules are part of the suite of legislation and legislative instruments that provide: • criteria for when SDA will be included in a participant's plan • when a property will be enrolled to be used as SDA • the obligations on providers of SDA, and • the payments that will be paid to providers. 'SDA provider' is defined under section 5 of the SDA rules to mean:
(a) a registered NDIS provider that is registered to provide specialist disability accommodation; or (b) a registered provider of supports that can provide specialist disability accommodation under its registration. You are a registered NDIS provider with the NDIS Quality and Safeguards Commission, approved under the SDA registration group. The property is enrolled as an SDA dwelling, and you provide SDA supports to an NDIS participant who is eligible to received SDA funding in their plan, but the funding amount is still be approved by the NDIA. Once the amount is approved, it will be included in the participant's plan. Accordingly, your supply of SDA is covered by Item 1 of the table in subsection 6(1) of the NDIS Determination. Therefore, paragraph 38-38(d) is satisfied. Accordingly, as all conditions of section 38-38 have been satisfied, your supply of leasing the SDA dwelling to provide SDA supports to an NDIS participant will be GST-free. Therefore, we consider the goods you acquired for constructing the SDA dwelling were for a creditable purpose because:
• They were acquired in carrying on your enterprise of leasing the SDA dwelling to provide SDA supports. • The acquisitions do not relate to making input taxed supplies. • The goods were not acquired for private or domestic purposes. Accordingly, paragraph 11-5(a) is satisfied. Are you required to be registered for GST? The next step is to determine whether you are required to be registered for GST since you currently are not registered for GST. Under section 23-5 you are required to be registered if: (a) you are carrying on an enterprise; and (b) your GST turnover meets the registration turnover threshold. We have determined above that you are carrying on an enterprise of providing SDA supports. Therefore, the next step is to consider is whether your GST turnover is $75,000 or more. Subsection 188-10(1) provides that you have a GST turnover that meets the registration turnover threshold if: (a) your current GST turnover is at or above $75,000 and the Commissioner is not satisfied that your projected GST turnover is less than $75,000; or
(b) your projected GST turnover is at or above $75,000. 'Current GST turnover' is defined in section 188-15 as the sum of the values of all of your supplies made in a particular month and the preceding 11 months. 'Projected GST turnover' is defined in section 188-20 as the sum of the values of all of your supplies made in a particular month and the following 11 months. Subsection 188-10(1) provides that an entity has a 'GST turnover' that meets a particular turnover threshold if: (a) your *current annual turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your *projected annual turnover is below the turnover threshold; or (b) your projected annual turnover is at or above the turnover threshold. Subsection 188-15(1) states that an entity's 'current GST turnover' during a particular month is the sum of the values of all the supplies that it made, or that it is likely to make, during the 12 months ending at that month; other than: (a) supplies that are *input taxed; or (b) supplies that are not for *consideration (and are not *taxable supplies under section 72-5); or
(c) supplies that are not made in connection with an *enterprise that you *carry on. Subsection 188-20(1) states that an entity's 'projected GST turnover' at a time during a particular month 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, other than: (a) supplies that are *input taxed; or (b) supplies that are not for *consideration (and are not *taxable supplies under section 72-5); or (c) supplies that are not made in connection with an *enterprise that you *carry on. Goods and Services Tax Ruling 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected turnover (GSTR 2001/7) explains how GST turnover affect the way GST applies to you. Paragraphs 16 - 19 of GSTR 2001/7 provides guidance on whether your GST turnover meets, or does not exceed, a turnover threshold:
16. Whether you have a GST turnover that meets or does not exceed a particular turnover threshold depends on an objective assessment of your projected GST turnover and current GST turnover. An 'objective assessment' is one that a reasonable person could be expected to arrive at having regard to the facts and circumstances which apply to your enterprise at the relevant time. The Commissioner will accept your assessment of these turnovers unless he has reason to believe that your assessment was not reasonable. 17. Under subsection 188-10(1), you meet a particular turnover threshold if your projected GST turnover is at or above the threshold. You also meet a turnover threshold if your current GST turnover is at or above the turnover threshold and it is not possible to conclude that your projected GST turnover is below the threshold. This will occur if your projected GST turnover is also above the relevant threshold, or if your circumstances are such that it is not possible to calculate a projected GST turnover. In either of these situations, the Commissioner cannot be satisfied that your projected GST turnover is below the turnover threshold.
18. Similarly, under subsection 188-10(2), you have a GST turnover that does not exceed a particular turnover threshold if your projected GST turnover is at or below that threshold. You also do not exceed a turnover threshold if your current GST turnover is at or below the turnover threshold and it is not possible to conclude that your projected GST turnover is above the threshold. This will occur if your projected GST turnover is at or below the relevant threshold or your circumstances are such that it is not possible to calculate a projected GST turnover. In either of these situations, the Commissioner cannot be satisfied that your projected GST turnover is above the turnover threshold.
19. Although your current GST turnover and your projected GST turnover may be capable of being determined on every day during a month, there is no requirement for continuous recalculation. However, under the GST Act there are obligations if you meet or exceed a particular threshold and there is an opportunity for you to make certain elections if you do not exceed a particular threshold. Therefore, you should be aware of the relevant thresholds likely to affect you and consider whether your turnover may be sufficiently close to the relevant thresholds to make a review prudent. For example, Entity A conducts an enterprise with a GST turnover of $70,000 and is not registered for GST. Because Entity A is aware that a $5,000 increase in its GST turnover will result in the $75,000 registration turnover threshold being met, it should monitor changes in its turnover. Entity B by contrast, is registered for GST, conducts an enterprise with a GST turnover of $600,000 and accounts on a cash basis. The nearest relevant threshold is the cash accounting turnover threshold ($2,000,000). Entity B may decide to review its current GST turnover and projected GST turnover on an annual basis whilst being aware that a significant change in turnover may require a further review.
The NDIA has enrolled the SDA dwelling to provide Specialist Disability Accommodation (SDA) supports. According to the NDIS Pricing Arrangements for SDA 2025-26, the maximum amount approved by the NDIA for this dwelling is $xx,xxx. The participant is eligible for SDA funding of $xx,xxx. However, you can only claim payment for SDA from the NDIA, the lesser of the amount the dwelling is enrolled for, or the amount of SDA funding that a participant is funded for in their NDIS Plan. The leasing agreement indicates that you will receive rental payments of $xxx per fortnight from the participant, which totals $x,xxx per year. Consequently, based on the information provided, it is reasonable to conclude that your current GST turnover and your projected GST turnover will not exceed the GST registration threshold. Therefore, paragraph 23-5(b) is not satisfied, and you are not required to register for GST under section 23-5. As you are not registered, and not required to be registered for GST, you are not entitled to claim input tax credits for these acquisitions. However, you may choose to register for GST if:
• you are carrying on an enterprise and your GST turnover is below the registration turnover threshold, or • you intend to carry on an enterprise from a specified date If you voluntarily register for GST, you will be entitled to claim input tax credits for your acquisitions. Backdating GST registration Subsection 25-10(2) states we may backdate an entity's GST registration, subject to the following limitations: (a) Where no registration application is made, the date of effect cannot be before the day on which the entity became required to be registered. (b) Where the entity applies for registration, the date of effect must not be before: (i) the date the entity specified in the application; or (ii) if we are satisfied that the entity was required to be registered as of an earlier date; or (c) If you are being registered only because you intend to carry on an enterprise - the date of effect must not be a day before the day specified, in your application for registration, as the day from which you intend to carry on the enterprise.
If an entity's GST registration is backdated, it will result in the entity being required to pay GST on taxable supplies and taxable importations made from that earlier date. The entity will be entitled to claim ITCs on creditable acquisitions or importations from the earlier date, provided the appropriate documentation is held. However, under subsection 25-10(1A), the date of effect must not be a day that occurred more than 4 years before the day of the decision, unless the Commissioner is of the opinion there has been fraud or evasion.