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Edited version of your written advice

Authorisation Number: 1051492446928

Date of advice: 8 March 2019

Ruling

Subject: Whether a health related service is GST free

Question

Are your supplies GST free under section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. You are making taxable supplies of services not provided for under section 38-10 of the GST Act.

This ruling applies for the following periods:

From 1 October 2017 until 30 September 2021

The scheme commences on:

1 October 2017

Relevant facts and circumstances

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 38-10.

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

A supply of a health service is GST-free if all of the following are satisfied:

Counselling services and Play Therapy

To qualify as a service of a kind specified in the table in subsection 38-10(1) of the GST Act, the service must be the provision of one of those actual services listed and not just similar to one of those services. The list is strictly interpreted as the actual service listed in the provision and not something similar to one of the services. This interpretation is supported by the fact that if the list is not required to be strictly interpreted, there is no necessity, for example, to include audiometry alongside audiology under item 3 in the Table.

In this case you are providing counselling and Play Therapy services.

Neither “counselling services” nor “Play Therapy” are listed in the Table. Therefore the “counselling services” and “Play Therapy” are not GST-free.

Psychotherapy services

You advised that the services you provide are a form of psychotherapy. Psychotherapy and psychoanalysis are not services of a kind specified in subsection 38-10(1). However, psychotherapy and psychoanalysis may be considered to be techniques of one or more services listed in subsection 38-10(1). If the psychotherapy is supplied by a recognised professional in relation to one of the listed services in subsection 38-10(1), for example psychology, and it is generally accepted in that profession as being necessary for the appropriate treatment of the recipient of the supply, then it will be GST-free, provided it also satisfies the third dot point given above, namely, 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.

Psychology is item 16 listed in the table in subsection 38-10(1). Therefore, psychotherapy may be considered as a technique used in the provision of psychology, which is specified in subsection 38-10(1). However, these services must be supplied by a recognised professional and considered as necessary for the appropriate treatment of the recipient of the supply.

The definition of a “recognised professional” is provided in section 195-1 of the GST Act:

So a recognised professional is a person who provides a service of a kind specified in the table in subsection 38-10(1) if the service is supplied in a State or Territory in which the person has permission or approval, or is registered under a State or Territory law prohibiting the supply of services of that kind without such permission, approval or registration. It is considered that ‘prohibiting’ includes a law which does not allow a person to hold themselves out as a provider of certain services as governed by that law.

Under the relevant State and Territory Acts dealing with psychology, a practitioner of psychology must be registered under that relevant Act. Therefore, it is considered that only a person registered for the provision of psychology under the relevant Acts will be a recognised professional in relation to psychology.

You are not registered for the provision of psychology services in any State or Territory in Australia. Therefore, you are not a “recognised professional” in relation to the supply of psychology, and thus, by extension, to the supply of psychotherapy techniques. Thus, the supplies you make in this regard will be taxable and not GST-free.


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