Edited version of private ruling

Authorisation Number: 1011571420646

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Ruling

Subject: Goods and services tax (GST) and allied health services

Question

Is GST payable on your supplies of the particular services (A to F), where Medicare Benefit is not payable?

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You supply occupational therapy and speech pathology/speech therapy services to children with a specific disorder. These services are performed in Australia.

References to child and children below are references to the child or children with the disorder.

You advised that speech pathology services and speech therapy services are the same thing.

The occupational therapy services are provided by occupational therapists. The speech pathology/speech therapy services are provided by speech pathologists.

The child's parent contracts you to provide the occupational therapy and speech pathology/speech therapy services.

You charge for the occupational therapy and speech pathology/speech therapy services.

The occupational therapy and speech pathology/ speech therapy services are performed in Australia.

References to family members below are references to family members other than the child.

Details of services

Service A

Type of service:

· Either speech therapy/speech pathology or occupational therapy only or a combined speech therapy/speech pathology/occupational therapy assessment usually over a number of sessions with two therapists.

What the service involves

Details were supplied

What purpose

· Therapists determine the language or sensory needs of the child to inform a plan that will determine the type of ongoing therapy needed.

Name of service:

Service B

Type of service:

· Either speech pathology/therapy or occupational therapy only or a combined speech pathology/speech therapy/occupational therapy assessment with two therapists present.

What the service involves:

Details were provided.

What purpose

· Therapist will model therapy strategies while explaining the strategy to the parent. Parent role is to observe strategies so that they can reinforce strategies at home. Child care staff or teachers can also be involved to support the therapy.

Name of service:

Service C

Type of service:

· Speech pathology/speech therapy or occupational therapy only or a combination of speech pathology/speech therapy and occupational therapy.

What the service involves:

Details were provided.

What purpose

· Addresses child's sensory and language needs to support the child's transition to school; helps child transfer skills from one setting to another and supports child's social interaction with others.

Name of service:

Service D

Type of service:

· Combined speech pathology/speech therapy and occupational therapy.

What the service involves:

Details were provided.

What purpose

· Use activities to address the identified needs of the child, such as social interaction with others, especially children of the same age, attention, understanding and using language, pretend play, responding to sensory needs and challenging behaviour.

Name of service:

Service E

Type of service:

· Speech pathology/speech therapy.

What the service involves:

Details were provided.

What purpose

· Help families to learn strategies to support their child in everyday routines with goals such as understanding and using spontaneous language, social interaction, attention, pretend play, responding to sensory needs and challenging behaviour.

Name of service:

Service F

Type of service:

Occupational therapy

What the service involves:

Details were provided.

What purpose

· One specified goal to support the child to participate and support independence at home or in the community, eg. shopping centre, park, preschool, mealtime, toileting.

You advised that services A to F are generally accepted in the occupational therapy and speech pathology professions as being necessary for the appropriate treatment of the child.

You require advice in respect of services for which Medicare benefit is not payable.

There is no State or Territory law under which occupational therapy practitioners must have permission, approval or registration to supply occupational therapy services.

There is no State or Territory law under which speech pathology practitioners must have permission, approval or registration to supply speech pathology services.

All of your occupational therapists are registered with a national professional association. The national professional association requires its members to have a certain sort of degree.

All of your speech pathologists are registered with a national professional association. The national professional association requires its members to have a certain degree.

The report provided to parents as part of service A and service C is a written report on the assessment of the child and recommendations for treatment. You supply service A and the associated report for an all inclusive charge. You supply service C and the associated report for an all inclusive charge.

The photo report provided to parents as part of service C is a report that contains photos and explanations, and these show what the child's preferences are; what motivates the child to participate in everyday activities and a school setting. You supply service C and the associated report for an all inclusive charge.

The photo report provided to parents as part of service D is a report that helps people to understand how to communicate with the child. You supply service D and the associated report for an all inclusive charge.

Services A to F are not supplied by or on behalf of a medical practitioner or approved pathology practitioner.

Reasons for decision

Summary

GST is not payable on your supplies of services A to F where Medicare benefit is not payable, as they are GST-free supplies of other health services under subsection 38-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

GST is not payable on your supplies of the reports, as they form part of GST-free supplies of services under subsection 38-10(1) of the GST Act.

Detailed reasoning

You are liable for GST on taxable supplies that you make.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and

(c) the supply is *connected with Australia; and

(d) you are *registered, or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.

(*Denotes a term defined in section 195-1 of the GST Act)

You satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the services in question for consideration and in the course or furtherance of an enterprise that you carry on. The supplies of the services are connected with Australia. Additionally, you are registered for GST.

There are no provisions of the GST Act or any other Act under which your supplies of the services are input taxed.

Therefore, what remains to be determined is whether your supplies of the services are GST-free.

Other health services

Subsection 38-10(1) of the GST Act discusses other health services. It states:

A supply is GST-free if:

(a) it is of a kind specified in the table in this subsection , or a kind specified in the regulations; and

(b) the supplier is a *recognised professional in relation to the supply of services of that kind; and

(c) 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.

Services specified in the table in subsection 38-10(1) of the GST Act

The table in subsection 38-10(1) of the GST Act includes occupational therapy,speech pathology and speech therapy. Your supplies of services A to F are supplies of occupational therapy and speech pathology/speech therapy services. Hence, you satisfy the requirement of paragraph 38-10(1)(a) of the GST Act.

Recognised professional

Recognised professional is defined in section 195-1 of the GST Act. It states:

Recognised professional; a person is a recognised professional, in relation to the supply of a service of a kind specified in the table in subsection 38-10(1),

if:

(a) the service is supplied in a State or Territory in which the person has a permission or approval, or is registered, under a *State law or a *Territory law prohibiting the supply of services of that kind without such permission, approval or registration; or

(b) the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, and the person is a member of a professional association that has uniform national registration requirements relating to the supply of services of that kind; or

(c) in the case of services covered by item 3 in the table - the service is supplied by an accredited service provider within the meaning of section 4 of the Hearing Services Administration Act 1997.

The practitioners who provide the occupational therapy services are occupational therapists.

The practitioners who provide the speech pathology/speech therapy services are speech pathologists.

You advised that there is no State or Territory law under which occupational therapy practitioners must have permission, approval or registration to supply occupational therapy services.

You advised that there is no State or Territory law under which speech pathology practitioners must have permission, approval or registration to supply speech pathology/speech therapy services.

All of your occupational therapists are registered with the national professional association,

All of your speech pathologists are registered with the national professional association.

Therefore:

· your occupational therapists are recognised professionals in relation to the supply of occupational therapy services, and

· your speech pathologists are recognised professionals in relation to the supply of speech pathology/speech therapy services.

Hence, you satisfy the requirement of paragraph 38-10(1)(b) of the GST Act.

Generally accepted in the relevant profession as being necessary for the appropriate treatment of the *recipient of the supply.

It is considered that 'appropriate treatment' will be established where the 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 recognised professional's particular area of training allows and will include subsequent supplies for the determined process.

Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) provides guidance at paragraph 156 in relation to services provided to one party but where consent to provide those services is given by another party. It states

156. In some fiduciary relationships it may be necessary for one party to give consent to the supply of a health service for another party. For example, a custodial parent gives consent for the medical treatment of a child. The Commissioner accepts in these circumstances that the other party, the child, is the recipient of the supply.

Services A to F involve occupational therapy and speech pathology/speech therapy services. You advised that these services are generally accepted in the occupational therapy and speech pathology professions as being necessary for the appropriate treatment of the child.

Additionally:

We consider that where a parent contracts you to provide occupational therapy or speech pathology/speech therapy services and the child attends the sessions, which is the case with services A to D and F and some sessions in service E, the child is the recipient of the supply during all of these sessions.

Where you provide instruction to the family members only during service E sessions that the child does not attend, the purpose is to train the family members to implement strategies relating to the child at home. In this situation, it is the parent who contracts you to provide these services. Even though the instruction is provided to the family members, the recipient of the supply of these speech pathology/speech therapy services is the child in these sessions.

Where a parent contracts you to provide service E, and you provide orientation to the parents, this orientation is incidental to the supply you make to the children, and therefore, the orientation forms part of the supply you make to the children.

Therefore, your supplies of services A to F are generally accepted in the occupational therapy and speech pathology professions as being necessary for the appropriate treatment of the recipient of the supply.

Hence, you satisfy the requirement of paragraph 38-10(1)(c) of the GST Act.

Therefore, your supplies of services A to F are GST-free under subsection 38-10(1) of the GST Act, as they satisfy all of the requirements of that provision and GST is not payable on these supplies.

The written and photo reports are provided to the parents in their capacity as legal representatives of their children. Therefore, you are not making a supply of reports to the parents, for GST purpose. The producing of reports involves services, and these services are components of the GST-free supplies of services made to the children. Hence, GST is not payable on your supplies of the reports.

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