ATO Interpretative Decision
ATO ID 2001/207
Goods and Services Tax
GST and chiropractic goods - back supportFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a registered chiropractor, making a GST-free supply under subsection 38-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a back support to a patient during a consultation?
Decision
No, the entity is not making a GST-free supply under subsection 38-10(3) of the GST Act, when it supplies a back support to a patient during a consultation. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity, a registered chiropractor and a 'recognised professional' for the purposes of the GST Act, supplies chiropractic services that are GST-free under subsection 38-10(1) of the GST Act.
The entity supplies a patient with a back support during a consultation. The patient acquires the back support for use as part of his/her on going treatment at home.
The back support is designed as a general aid for people with back problems and is not individually customised to treat the specific back problems of the particular patient. It is not a GST-free medical aid or appliance under section 38-45 of the GST Act.
The back support and the chiropractic services are supplied from the same premises.
The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.
Reasons For Decision
Subsection 38-10(3) of the GST Act provides that a supply of goods is GST-free if:
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- it is made to a person in the course of supplying to that person a service which is GST-free under subsection 38-10(1) of the GST Act; and
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- it is made at the premises at which the service is supplied.
From the facts, the entity supplies chiropractic services that are GST-free under subsection 38-10(1) of the GST Act. Furthermore, the back support is supplied from the same premises at which the chiropractic service is supplied. Therefore, the question at issue is whether the back support is supplied 'in the course of' supplying the GST-free chiropractic services.
It is considered that the phrase 'in the course of' in the context of subsection 38-10(3) of the GST Act, requires the goods to be supplied at the same point in time at which the GST-free chiropractic services are supplied. In addition, the goods must be either:
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- customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free chiropractic service; or
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- necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.
As the back support is provided at the same time the GST-free chiropractic services are supplied, the question at issue is whether it is customised or manipulated for the exclusive treatment of the illness of disability of the particular patient who is the recipient of the GST-free chiropractic service, or it is necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.
In this case, the back support that is provided to the patient is not customised to treat the patient's particular back problems. Furthermore, the back support is not necessarily utilised as an integral part of the patient's treatment during that specific consultation. The patient acquires the back support for use as part of his/her on going treatment at home.
As the supply is not made 'in the course of' the GST-free chiropractic session, the requirements under subsection 38-10(3) of the GST Act are not met. Therefore, the entity is not making a GST-free supply when it supplies a back support to the patient.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, as the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.
Date of decision: 11 July 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
subsection 38-10(1)
subsection 38-10(3)
section 38-45
Division 40
ATO ID 2001/208
Keywords
Goods and services tax
GST free
GST health
GST other health goods
GST other health services
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 11 July 2001 | Original statement |
| 15 June 2007 | Archived |