ATO Interpretative Decision

ATO ID 2004/504 (Withdrawn)

Goods and Services Tax

GST and training provided to a parent of a child when the training is not a requirement of their child's speech therapy treatment
FOI status: may be released
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Issue

Is the entity, a speech pathologist, 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 provides training to the parent of a child, and that training is not a requirement of their child's speech therapy treatment?

Decision

No, the entity is not making a GST-free supply under subsection 38-10(1) of the GST Act when it provides training to the parent of a child, and that training is not a requirement of their child's speech therapy treatment.

The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a speech pathologist that supplies speech therapy to children. The entity also conducts a parents' training group to train parents in therapy strategies that are relevant to their children.

The entity has assessed a child and advised the parent that the particular therapy strategies taught at the parent's training group will not assist in treating their child's particular speech difficulty. Despite this recommendation the parent chooses to attend the training group.

The entity is a member of the relevant national professional association and is a recognised professional as defined in section 195-1 of the GST Act. The entity is registered for goods and services tax (GST) and 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 other health services if:

•
the entity 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)
•
the entity is a recognised professional in relation to the supply of services of that kind, and
•
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.

Speech pathology services are listed at item 19 in the table in subsection 38-10(1) of the GST Act and the entity is a recognised professional in relation to the supply of speech pathology. As such, the first two requirements under subsection 38-10(1) of the GST Act are satisfied.

The third requirement is that the treatment must be generally accepted in the relevant health profession as being necessary for the appropriate treatment of the recipient.

'Appropriate treatment' will be established where a recognised professional, assesses the recipient's state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that recipient, insofar as that professional area of training allows. It will include subsequent supplies for the determined process.

Appropriate treatment includes the principles of preventative medicine. Such treatment must be generally accepted in the profession associated with supplying services of that kind, as being necessary.

The entity has assessed a child and advised the parent that the particular therapy strategies taught at the parent's training group will not assist in treating their child's particular speech difficulty. Despite this recommendation the parent chooses to attend the training group. As this training will not assist the child, the provision of training to the parent is not appropriate treatment of the child. As such, the third requirement under subsection 38-10(1) of the GST Act is not satisfied. Therefore, the supply does not satisfy the requirements under subsection 38-10(1) of the GST Act.

The entity is registered for GST and the supply of training to the parent satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under any other provision of 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 when it provides training to the parent of a child, and that training does not form part of the child's treatment.

Note: Sometimes, a parent may choose to attend a parents' training group even though their child has not yet been assessed by the entity. The provision of training to the parent in these circumstances is not appropriate treatment of the child. As such, the third requirement under subsection 38-10(1) of the GST Act is not satisfied and the supply is not GST-free.

Date of decision:  22 July 2002

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   subsection 38-10(1)
   subsection 38-10(1) table item 19
   Division 40
   section 195-1

A New Tax System (Goods and Services Tax) Regulations 1999
   Table of Content

Related ATO Interpretative Decisions
ATO ID 2004/501
ATO ID 2004/502
ATO ID 2004/503

Keywords
Goods and service tax
GST health
Section 38-10 - other health services
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  25 June 2004

ISSN: 1445-2782

history
  Date: Version:
  22 July 2002 Original statement
You are here 22 June 2007 Archived

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