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Edited version of your written advice
Authorisation Number: 1051208006554
Date of advice: 5 May 2017
Ruling
Subject: GST and occupational therapy services
Question
Is GST payable on the services that you provide to your patients?
Answer
GST is not payable on your supply of occupational therapy services where it is accepted in the occupational therapy profession as necessary and appropriate to treat the individual patient who is the recipient of your services. Your supply of occupational therapy services is GST-free under subsection 38-10(1) of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in this circumstance. When a supply is GST-free, no GST is payable on the supply.
However, the supply of your services to the individual is not GST-free where there is no 'appropriate treatment of the recipient of the supply' involved when the supply is made. The supply of your services is a taxable supply in this circumstance. GST is payable on taxable supplies.
Relevant facts and circumstances
● You are an entity and you are registered for the goods and services tax (GST).
● You provide clinical occupational therapy services to people with disabilities in Australia.
● You do not provide any sales, spare parts, or repairs of any medical aids or appliances.
● You only provide occupational therapy services.
● The occupational therapist is registered with the Australian Health Professionals Regulation Authority (AHPRA), and is a member of the Australian Association of Occupational Therapists, referred to as OT Australia. OT Australia has the same membership requirements nationally.
● The majority of the services that you provide are to the National Disability Insurance Scheme (NDIS) participants. You also provide services to non-NDIS private patients and non-NDIS clients who are funded by other government organisations and insurance companies.
● You do not receive any funding from the government for making supplies to your clients regardless of whether they are NDIS participants or not.
● You provide reports and recommendations for a range of compensatory equipment to enhance independent living. For example, you provide recommendations for wheelchairs/wheelchair seating and other related equipment.
● Seating and wheelchair prescription is listed as an area of practice on the OT Australia's webpage. The assessment and delivery services that you provide in wheelchair and seating are in line with those accepted by the occupational therapy profession.
● Your work could be divided into several categories.
● You charge a separate fee for each of the above categories and each of these is listed as a separate line item on the invoice. This is done to demonstrate accountability to the customer.
● The majority of your work leads to prescribing new equipment.
● For clients who have problems with existing equipment, the initial appointment is an interview and assessment/inspection to determine the problem and develop a plan of intervention. Typical reasons for review are problems with ergonomics, poor posture, pain and development of pressure areas.
● An agreement is reached with the client prior to commencing services as to who will be making the payment for the services rendered and invoiced. If the client is not going to take care of the invoices, that is, if another entity will pay for the services, you would contact the organisation to confirm that they will take care of the payment.
● You have provided copies of invoices that you have issued to both NDIS participants and non-NDIS clients for the itemised services that you have provided to them.
● You have also provided a copy of the Service Agreement made between you and the NDIS participant. This Service Agreement is made for the purpose of providing supports that are reasonable and necessary under the Participant's NDIS plan and is for the period of the current plan.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(1)
Reasons for decision
GST is payable on a taxable supply. You make a taxable supply under section 9-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if:
(a) you make the supply for consideration; and
(b) the supply is made in the course 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 for GST; and
(e) the supply is neither GST-free nor input taxed.
Your supply of the occupational therapy services to the people with disabilities would satisfy the requirements of paragraphs (a) to (d) above. However, your supply would not be a taxable supply to the extent that it is GST-free or input taxed.
There are no provisions in the GST Act that make your supply of occupational therapy services input taxed. The next step is to determine whether this supply is GST-free.
Subsection 38-10(1) of the GST Act
A supply of health service is GST-free when it satisfies all the requirements in subsection 38-10(1) of the GST Act.
The requirements of subsection 38-10(1) of the GST Act are:
(a) the service is specified in the table in this subsection, or in the GST regulations; and
(b) the supplier is a recognised professional for the services in question; and
(c) the supply would generally be accepted, in the supplier's profession, as being necessary for the appropriate treatment of the recipient of the supply.
Where your supply of the occupational therapy services is accepted in the occupational therapy profession as necessary and appropriate to treat the individual who is the recipient of your services, your supply of occupational therapy services is GST-free under subsection 38-10(1) of the GST Act.
However, where your supply of occupational therapy services is for the purposes of preparing a report and the actual preparation of the report is to be used for other purposes other than the individual receiving appropriate treatment from you, requirement (c) in subsection 38-10(1) of the GST Act is not met. In this instance, your supply of occupational therapy services to the individual is not GST-free under subsection 38-10 (1) of the GST Act. Your supply will be a taxable supply.
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