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Featured QA - GST - Family Day Care

7 April 2011


I have two questions in relation to our Family Day Care operations.

Firstly, the family day care centre owns a playgroup area. The area is currently being rented out to a third party for a playgroup session. Would we charge GST on this daily rental amount?

Secondly, for each child that turns up to the playgroup, council will be charging one dollar to cover the costs of the consumables. Would this have GST on in?


It depends. Section 38-155 of the GST Act treats supplies that are "directly related to child care that is GST-free" as GST-free supplies themselves. Accordingly, if the entity to which the playgroup area is being leased is a registered carer under s 38-140 or an approved child care service under s 38-145, and the playgroup area is directly related to the child care provided by the entity, the supply will be GST-free.

The $1 levy for consumables could also theoretically fall within the GST-free provisions of s 38-155 if the consumables are "directly related to child care that is GST-free”. 

A similar issue was considered by the Tax Office in GST Determination GSTD 2001/1 where levies were charged to support schemes to provide services such as:

  • toy library for Carers to utilise for the children in their care;
  • handouts, newsletters and updates for both Carers and parents;
  • processing of attendance sheets which record children in care; and
  • calculation and administration of CCB entitlement for Carers.

The Determination concluded that the levies were GST-free under s 38-155.