EXPLANATORY STATEMENT
GST-free Supply (Long Day Care) Determination 2002
Summary
This Determination is made under paragraph 38-150(e) of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act).
The purpose of the Determination is to make GST-free, from 1 July 2000, that is, from the introduction of the GST, a supply of long day care, that is, all-day or part-time child care provided to predominantly below school age children in premises other than a home of any of the children being cared for, by a supplier that is eligible for funding from the Commonwealth under guidelines made by the Child Care Minister relating to that care but is not approved under the A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Administration Act) for the purposes of the family assistance law.
Background
Subdivision 38-D of the GST Act deals with GST-free supplies of child care. It makes GST-free a supply of child care by a child care service approved under the Family Assistance Administration Act for the purposes of family assistance law (parents may be eligible for child care benefit for that care) and a supply by a supplier that is not so approved but is eligible, under guidelines made by the Child Care Minister, for funding from the Commonwealth relating to specified types of care (parents are not eligible for child care benefit for that care).
Long day care is supplied by long day care services approved under the Family Assistance Administration Act for the purposes of family assistance law. From the introduction of the GST on 1 July 2000, such a supply is GST-free under section 38-150 of Subdivision 38-D of the GST Act.
Long day care is also supplied by suppliers that are not so approved but are eligible for funding from the Commonwealth relating to that kind of care (for example, Commonwealth funded long day care may be supplied by innovative child care services in communities where conventional child care services are either unavailable or inappropriate). The provisions of Subdivision 38-D of the GST Act do not operate to make GST-free a supply of long day care by those suppliers.
Paragraph 38-150(e) of the GST Act authorises the Child Care Minister to determine in writing a type of care provided by a supplier that is eligible for funding from the Commonwealth under guidelines made by the Child Care Minister relating to that care, for the purpose of making a supply of that care by that supplier GST-free.
As it is intended that a supply of long day care by a supplier that is not approved for the purposes of family assistance law but is eligible for Commonwealth funding in relation to that care be GST-free, this Determination, made under paragraph 38-150(e) of the GST Act, makes long day care supply by those suppliers GST-free.
This Determination takes effect on 1 July 2000, that is, from the introduction of the GST. It has the effect of removing liability for GST of suppliers of Commonwealth funded long day care that are not approved for the purposes of family assistance law. The Determination therefore does not result in the imposition of liabilities on any person in respect of anything done or omitted to be done before the date of its notification and it does not affect the right of any person so as to disadvantage that person.
Explanation of the provisions
Section 1 of the Determination states the name of the Determination and section 2 states that the Determination is taken to have commenced on 1 July 2000 (this is the date of the introduction of the GST).
Section 3 contains interpretation provisions.
Section 4 provides that a determination is made under paragraph 38-150(e) of the GST Act determining long day care, by a supplier that is eligible for funding from the Commonwealth under guidelines made by the Child Care Minister relating to that care, as the type of care the supply of which is GST-free under section 38-150 of the GST Act. The effect of section 4 is that it makes GST-free long day care supplied by a Commonwealth funded supplier that is not approved for the purposes of family assistance law (long day care supplied by approved child care services is GST-free as a result of the operation of section 38-145 of the GST Act).
“Long day care” is defined in section 3 as all-day or part-time child care provided to predominantly below school age children in premises other than a home of any of the children being cared for.
The “Child Care Minister” is defined by reference to section 195-1 of the GST Act, which specifies that it is the Minister administering the Child Care Act 1972 and the family assistance law (within the meaning of section 3 of the Family Assistance Administration Act).