NDIS Gst Free | Gotax
July 3, 2024
Is Income from NDIS GST-Free?
The National Disability Insurance Scheme (NDIS) is a critical support system for Australians with disabilities, providing them with the necessary services and assistance to improve their quality of life. For businesses and service providers involved in the NDIS, understanding the GST implications is essential. Now let's take a look...
GST and NDIS: The Basics
In Australia, the supply of goods and services can either be taxable, GST-free, or input-taxed. The GST status of NDIS-related income depends largely on the nature of the services provided and the recipient of those services.
GST-Free NDIS Supplies
According to the Australian Taxation Office (ATO), supplies are GST-free if they meet the following criteria:
- NDIS Participant: The services must be provided to a participant in the NDIS.
- Registered Plan: The services must be part of the participant's NDIS plan.
- Registered Provider: The supplier must be a registered NDIS provider.
Examples of GST-free supplies under the NDIS include:
- Therapeutic Services: Services such as physiotherapy, occupational therapy, and speech therapy, provided they are part of the participant’s NDIS plan.
- Personal Care and Support Services: Assistance with daily personal activities like bathing, dressing, and meal preparation.
- Community Participation: Support that helps participants engage in community activities.
Traps to Avoid
While many NDIS-related supplies are GST-free, there are some common traps that providers should be aware of:
- Non-Registered Providers: If you are not a registered NDIS provider, your services may not be GST-free even if they are included in a participant’s plan.
- Non-Plan Services: Services provided to NDIS participants that are not part of their NDIS plan are generally not GST-free.
- Incorrect Invoicing: Ensure your invoices correctly reflect the GST status of your services. Incorrectly charging GST on GST-free supplies can lead to compliance issues and potential penalties.
Examples to Illustrate
Example 1: GST-Free Supply
Sandra is an NDIS participant with a plan that includes physiotherapy sessions. She receives these sessions from a registered NDIS provider. Since the service is part of her NDIS plan and the provider is registered, the physiotherapy sessions are GST-free.
Example 2: Taxable Supply
Gerry, an NDIS participant, hires a gardener for his personal garden maintenance. The gardener is not a registered NDIS provider, and the service is not included in John’s NDIS plan. Therefore, the gardening service is not GST-free and GST should be charged.
Closing Advice
Navigating the GST implications of NDIS-related income can be complex, but it is crucial for compliance and financial efficiency. Always ensure you are a registered NDIS provider and that the services you offer are part of the participant’s NDIS plan to qualify for GST-free status.
Tax Tip: Keep detailed records and regularly review your GST obligations. This will not only help you stay compliant but also ensure you are taking full advantage of any GST-free opportunities available under the NDIS. If in doubt, consult with a tax professional or the ATO for guidance.
Best Record keeping Apps:
eCashbooks - for those that have ventured into small business.
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