ATO Interpretative Decision
ATO ID 2001/660
Goods and Services Tax
GST and massage servicesFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 qualified massage therapist, making a GST-free supply under subsection 38-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a massage service to a patient?
Decision
No, the entity is not making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies a massage service to a patient. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a qualified massage therapist. The entity is not a Physiotherapist, Acupuncturist, Chiropractor, Nurse, Occupational therapist or an Osteopath.
The entity supplies a massage service to its patient.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Under subsection 38-10(1) of the GST Act, an entity makes a GST-free supply of health services if:
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- it provides a service of a kind specified in the table in subsection 38-10(1) of the GST Act or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) (paragraph 38-10(1)(a) of the GST Act); and
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- the entity is a recognised professional in relation to the supply of services of that kind (paragraph 38-10(1)(b) of the GST Act); and
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- the supply would generally be accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the recipient of the supply (paragraph 38-10(1)(c) of the GST Act).
Massage therapy is not listed in the table in subsection 38-10(1) of the GST Act . Therefore, massage therapy, in itself, does not satisfy the requirement in paragraph 38-10(1)(a) of the GST Act.
However, the requirement in paragraph 38-10(1)(a) of the GST Act is satisfied where the supplier is supplying one of the services listed in the table in subsection 38-10(1) of the GST Act and massage therapy is a standard technique or a component of the supply of that listed service. For example, 'Physiotherapy,' 'Acupuncture', 'Chiropractic', 'Nursing', 'Occupational therapy' and 'Osteopathy' are services in the table in subsection 38-10(1) of the GST Act for which massage therapy may be considered a standard technique or a component of the supply.
The entity in this case is supplying a massage service. The entity is not supplying any of the relevant services listed in the table in subsection 38-10(1) of the GST Act or the GST Regulations. Therefore, the requirement in paragraph 38-10(1)(a) of the GST Act is not satisfied and the supply is not GST-free under subsection 38-10(1) of the GST Act.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not GST-free under Division 38 of the GST Act or 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 when it supplies massage services to a patient.
Date of decision: 6 September 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
subsection 38-10(1)
paragraph 38-10(1)(a)
paragraph 38-10(1)(b)
paragraph 38-10(1)(c)
Division 40
the Regulations
Other References:
Health Issues Register - Issue 2.a.9
Keywords
Goods & services tax
GST-free
GST health
Section 38-10 - other health services
GST supplies & acquisitions
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 6 September 2001 | Original statement |
| 22 June 2007 | Archived |