We all know Goods and Services Tax(GST) is a 10% cost added on most goods, services, and other items sold or consumed in Australia. So, why is it uncommon to see GST added to NDIS supports and services?
GST, the NDIS & the ATO
The Australian Taxation Office(ATO) outlines that services provided to meet the funding guidelines of the NDIS are not subject to GST. This includes assessment, planning, and implementation of services such as personal care, therapy, and support services for individuals with disabilities. The reason NDIS related services are typically GST free is because these services are considered necessities.
What are the exceptions?
NDIS providers can charge GST if they are registered for GST and if the services they provide to NDIS participants are not GST exempt. Some examples of GST exempt services include healthcare, education, and most community services.
However, it is important to note that not all services related to disabilities are exempt from GST. It is essential for NDIS service providers to know the difference between GST exempt and taxable services to avoid potential issues with the ATO. Understanding the regulations around GST, the NDIS, and the ATO is crucial for both individuals with disabilities and service providers to ensure fair and accurate treatment.
Invoicing with or without GST
According to the ATO, a legitimate tax invoice must specify the GST amount or should specifically state that it is GST free. NDIS providers are responsible for ensuring compliance with all GST regulations and the accurate reporting and payment of GST to the ATO. This includes ensuring all invoices and receipts are compliant with GST regulations, and the participant has a clear understanding of any GST charges.
If GST has been added to a participant invoice, we can still process invoices up to the maximum amount listed in the NDIS pricing arrangements for that line item. Essentially the GST needs to be inclusive within that limit. If the added GST goes over that limit, it is likely the service will be short funded.
With most NDIS invoices being GST free, when we receive an invoice that includes GST, the invoice needs to be cross checked which may cause some minor processing delays.
Be sure to maintain accurate records of their GST-related activities, undergo regular audits, and promptly address any discrepancies to remain compliant with GST regulations.
For the most accurate advice, please consult a registered tax accountant. Plan Managers, while requiring accounting qualifications, are not tax advisors for providers.
Read more about the benefits of working with an independent, professional Plan Manager. Alternatively, contact our friendly team on 1300 322 273 or email@example.com.