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Ruling

Subject: goods and services tax (GST) and exercise physiology services; remedial massage therapy services and dietician services

Question 1

Is GST payable on your supply of private exercise physiology services?

Answer

Yes.

Question 2

Is GST payable on your supply of the remedial massage therapy specified?

Answer

GST is payable on your supply of the remedial massage therapy specified.

Question 3

Is GST payable on your supply of exercise physiology services under a certain program through a certain organisation?

Answer

No.

Question 4

Is GST payable on your supply of exercise physiology services to certain sorts of patients?

Answer

Yes.

Question 5

Is GST payable on your supply of exercise physiology services, where you provide the invoices to a certain organisation?

Answer

Yes.

Question 6

Is GST payable on your supply of exercise physiology services, where invoices are provided to insurance companies for payment?

Answer

Yes.

Question 7

Is GST payable on your supplies of group lectures given by an accredited exercise physiologist employed by you?

Answer

GST is not payable on these supplies if medicare benefit is payable.

GST is payable on these supplies if medicare benefit is not payable.

Question 8

Is GST payable on your supplies of group lectures given by an accredited dietician, employed by you?

Answer

GST is not payable on your supply of such a lecture to a particular person if medicare benefit is payable.

GST is also not payable on your supply of such a lecture to a particular person if the dietician assesses the person's state of health and determines that the lecture is an appropriate form of treatment for that person.

In any other circumstances, GST is payable on such a supply.

Where the lecture is not part of a particular attendee's treatment plan, GST will be payable on your supply of the lecture to that person unless medicare benefit is payable.

Question 9

Is GST payable on your supplies of services to a certain organisation, such as case conferencing and phone calls that do not involve direct patient contact?

Answer

Yes.

Question 10

Should you calculate all of the GST you have missed over the past certain number of years and send your customers new invoices for amounts that include the missed GST amounts?

Answer

There is nothing in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) that requires you to do so.

There is nothing in the GST Act that prohibits you from doing so. If you did so, this would not contravene the GST Act.

Whether you do so is a contractual matter between you and your customers to determine and the Australian Taxation Office (ATO) cannot get involved in contractual matters.

Where you have not previously remitted GST to the ATO in respect of amounts received by you for your taxable supplies of services, you will need to amend the relevant activity statements to reflect the GST payable or alternatively make the revision in your next activity statement. You do not need to make these revisions in respect of unpaid GST where 4 years have passed since the GST liability became payable.

Relevant facts and circumstances

You are registered for GST.

You operate a clinic that offers various services including physiotherapy, remedial massage, exercise physiology, dietetics and diabetic education.

Medicare benefit is not payable for the private exercise physiology services.

Medicare benefit is not payable for the remedial massage services specified.

The exercise physiology services are not part of physiotherapy treatment.

The remedial massage services specified are not part of physiotherapy treatment.

Medicare benefit is payable for the exercise physiology under a certain program.

The ATO is aware that medicare benefit is not payable on the supply of exercise physiology to certain sorts of patients.

In some cases, you supply exercise physiology services to patients where your fees are paid for by a certain organisation or an insurance company. Medicare benefit is not payable for these services.

You supply group lectures given by accredited physiologists employed by you. Some of these supplies are covered by medicare benefit and some are not.

You supply group lectures given by accredited dieticians employed by you. You provided the following information in relation to these services:

· Some of these supplies are covered by medicare benefit and some are not.

· Your dieticians are members of a certain association.

· These lectures are generally accepted in the dietician profession as being necessary for the appropriate treatment of the people who attend the lectures - obese people.

Both types of lectures are generally not part of a patient's treatment plan.

Certain services you supply, such as case conferencing and phone calls, to a certain organisation/ insurance company do not involve direct patient contact. Medicare benefit is not payable for your supplies of these services.

The services you supply may or may not be provided on referral. External health practitioners do not pay you for your services.

In the past certain number of years you have made supplies which may have been taxable but which you have treated as GST-free.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-7(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(1)

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

Taxation Administration Act 1953 Schedule 1 subsection 105-50(1)

Health Insurance Act 1973 section 3

Reasons for decisions

Question 1

Summary

Your supply of private exercise physiology services is not a GST-free supply of a medical service under subsection 38-7(1) of the GST Act, as medicare benefit is not payable for these services and they are not supplied by or on behalf of a medical practitioner.

Your supply of private exercise physiology services is not a GST-free supply of another health service under subsection 38-10(1) of the GST Act as exercise physiology is not listed in the table in subsection 38-10(1) of the GST Act.

GST is payable on your supply of private exercise physiology services because all of the requirements of section 9-5 of the GST Act are satisfied.

Detailed reasoning

GST is payable by you on any taxable supply that you make.

Section 9-5 of the GST Act sets out the requirements of a taxable supply and it states:

You make a taxable supply if:

· you make the supply for *consideration; and

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

· the supply is *connected with Australia; and

· you are *registered, or *required to be registered for GST.

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.)

In your case, you satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. You supply private exercise physiology service for consideration and in the course of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

Your supplies of the private exercise physiology services are not input taxed under any provision of the GST Act or under any other Act. Therefore, what is left to determine is whether your supplies of these services are GST-free.

Under Subdivision 38-B of the GST Act, supplies of certain health services are GST-free. In particular, section 38-7 of the GST Act (the supply of medical services) and section 38-10 of the GST Act (the supply of other health services) are relevant.

Medical services

Subsection 38-7(1) of the GST Act provides that a supply of a medical service is GST-free.

Section 195-1 of the GST Act defines a 'medical service' to mean:

(a) a service for which medicare benefit is payable under Part II of the Health Insurance Act

1973; or

(b) any other service supplied by or on behalf of a *medical practitioner or *approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the *recipient of the supply.

Section 195-1 of the GST Act defines 'medical practitioner'. A 'medical practitioner' is a person who is a medical practitioner for the purposes of the Health Insurance Act 1973.

Section 3 of the Health Insurance Act 1973 defines medical practitioner as a person registered or licensed as a medical practitioner under a law of a State or Territory that provides for the registration or licensing of medical practitioners, subject to certain exclusions.

Medicare benefit is not payable for the private exercise physiology.

Additionally, your employees are not medical practitioners or approved pathology practitioners and you do not supply the private exercise physiology services on behalf of such persons.

Therefore, your supplies of private exercise physiology services are not GST-free supplies of medical services under subsection 38-7(1) of the GST Act.

Other health services

Supplies of other health services that satisfy the requirements of subsection 38-10(1) of the GST Act are GST-free. Subsection 38-10(1) of the GST Act states:

A supply is GST-free if:

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

· the supplier 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.

For a service to be of a kind specified in the table, the service must be the provision of one of the actual services listed and not just something similar to one of the services. At this stage, no regulations have been made under section 38-10 of the GST Act.

The services specified in the table are as follows:

· Aboriginal or Torres Straight Islander health

· Acupuncture

· Audiology, audiometry

· Chiropody

· Chiropractic

· Dental

· Dietary

· Herbal medicine (including traditional Chinese herbal medicine)

· Naturopathy

· Nursing

· Occupational therapy

· Optometry

· Osteopathy

· Paramedical

· Pharmacy

· Psychology

· Physiotherapy

· Podiatry

· Speech pathology

· Speech therapy

· Social work

Exercise physiology is not a service specified in the table in subsection 38-10(1) of the GST Act. Hence, these services do not satisfy the requirement of paragraph 38-10(1)(a) of the GST Act.

Therefore, your supply of private exercise physiology is not a GST-free supply of another health service under subsection 38-10(1) of the GST Act.

Your supply of private exercise physiology is not GST-free under other provisions of the GST Act or under any other Act.

Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied, GST is payable on your supply of private exercise physiology.

Question 2

Summary

Your supplies of the remedial massage services specified are not GST-free supplies of medical services under subsection 38-7(1) of the GST Act, as medicare benefit is not payable for these services and they are not supplied by or on behalf of a medical practitioner.

Your supplies of the remedial massage services specified are not GST-free supplies of an other health service as remedial massage is not listed in the table in subsection 38-10(1) of the GST Act.

GST is payable on your supply of the remedial massage services specified because all of the requirements of section 9-5 of the GST Act are satisfied.

Detailed reasoning

Your supply of the remedial massage services specified satisfies the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. You supply the massage services for consideration and in the course or furtherance of an enterprise you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

There are no provisions in the GST Act or any other Act under which your supply of the remedial massage services specified are input taxed.

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

Medicare benefit is not payable for the remedial massage services specified.

The remedial massage services specified are not supplied by or on behalf of a medical practitioner or approved pathology practitioner.

Therefore, your supplies of the remedial massage services specified are not GST-free supplies of medical services under subsection 38-7(1) of the GST Act.

Remedial massage is not listed in the table in subsection 38-10(1) of the GST Act. Therefore, your supplies of the remedial massage services specified are not GST-free supplies of other health services under subsection 38-10(1) of the GST Act.

Your supplies of the remedial massage services specified are not GST-free under other provisions of the GST Act or under any other Act.

Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied, GST is payable on your supply of the remedial massage services specified.

Question 3

Medicare benefit is payable in the circumstances set out in question 3. Therefore, your supplies of these services under those circumstances are medical services. Hence, your supplies of these services under those circumstances are GST-free under subsection 38-7(1) of the GST Act. Therefore, these are not taxable supplies. Hence, GST is not payable on your supplies of these services under those circumstances.

Questions 4, 5 and 6

GST is payable on your supplies of the exercise physiology services under the circumstances set out in questions 4, 5 and 6 for the same reasons that GST is payable on your supplies of private exercise physiology (see the reasons for decision for question 1).

Question 7

Summary

GST is not payable on your supply of a group lecture given by accredited exercise physiologists to a particular person where medicare benefit is payable, as these supplies are GST-free supplies of medical services under subsection 38-7(1) of the GST Act under such circumstances.

Your supplies of these services are not GST-free supplies of a medical service under subsection 38-7(1) of the GST Act where medicare benefit is not payable.

Your supplies of these services are not GST-free supplies of other health services under subsection 38-10(1) of the GST Act as exercise physiology is not listed in the table in subsection 38-10(1) of the GST Act.

As all of the requirements of section 9-5 of the GST Act are satisfied where you supply these services and medicare benefit is not payable, GST is payable on your supply of these services where medicare benefit is not payable.

Detailed reasoning

Your supplies of group lectures given by accredited exercise physiologists satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. You make these supplies for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

There are no provisions in 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.

Where medicare benefit is payable for the group lectures given by accredited exercise physiologists, you make a supply of a medical service. Therefore, under these circumstances, you make a GST-free supply under subsection 38-7(1) of the GST Act. Hence, you do not make a taxable supply under these circumstances. Therefore, GST is not payable on these supplies under these circumstances.

Your supplies of these services are not supplies made by or on behalf of a medical practitioner or approved pathology practitioner. Therefore, your supplies of group lectures given by accredited exercise physiologists are not GST-free supplies of medical services under subsection 38-7(1) of the GST Act where medicare benefit is not payable.

Exercise physiology is not a service specified in the table in subsection 38-10(1) of the GST Act. Therefore, your supplies of group lectures given by accredited exercise physiologists are not GST-free supplies of other health services under subsection 38-10(1) of the GST Act.

Your supplies of group lectures given by accredited exercise physiologists are not GST-free under other provisions of the GST Act or under any other Act.

Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied where medicare benefit is not payable, your supplies of these services are taxable supplies where medicare benefit is not payable. Hence, GST is payable on your supplies of these services where medicare benefit is not payable.

Question 8

Summary

Your supply of a group lecture given by an accredited dietician employed by you to a particular person will be a GST-free supply of a medical service under subsection 38-7(1) of the GST Act where medicare benefit is payable. Therefore, GST will not be payable under such circumstances.

Also, where you supply a group lecture given by an accredited dietician employed by you to a particular person and the dietician assesses the person's state of health and determines that the lecture is an appropriate form of treatment for the person, your supply of the lecture to that person will be a GST-free supply of an other health service under subsection 38-10(1) of the GST Act. Therefore, GST will not be payable under such circumstances.

Under any other circumstances, your supplies of the lectures will not be GST-free supplies of medical services under subsection 38-7(1) of the GST Act or GST-free supplies of other health services under subsection 38-10(1) of the GST Act. In these cases, GST will be payable as all of the requirements of section 9-5 of the GST Act will be satisfied.

Detailed reasoning

Your supplies of group lectures given by accredited dieticians employed by you involve the supply of a service listed in the table in subsection 38-10(1) of the GST Act - dietician services. Therefore, the requirement of paragraph 38-10(1)(a) of the GST Act is satisfied.

Recognised professional

In accordance with section 195-1 of the GST Act, a person is a recognised professional, in relation, to a supply of a service listed in the table if:

· 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

· the service is supplied in a State or Territory in which there is no such State or Territory law 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.

In accordance with issue 2.a.11 of the Health Industry Partnership - Issues Register, the requirement under paragraph 38-10(1)(b) of the GST Act that the supplier of 'other health services' be a recognised professional, is given meaning by the context in which it appears. It is considered that in this context, it is taken to be a requirement that the person who actually performs the 'other health service' must herself or himself, be a recognised professional in relation to supplying services of that kind. Due to their very nature, a practice company or partnership can not itself perform the services it may supply through others, such as recognised professionals.

There is no legislation under which dieticians must be permitted, approved or registered to practice as dieticians. However, there is a national professional association that relates to that health service that has uniform national registration requirements relating to the supply of services of that kind, that is, a certain association. Your dietician staff are members of that association. Hence, your dietician staff are recognised professionals in relation to their provision of dietician services. Therefore, the requirement of paragraph 38-10(1)(b) of the GST Act is satisfied.

Issue 2.a of the Health Industry Partnership - Issues Register provides the ATO view on the meaning of the appropriate treatment requirement in paragraph 38-10(1)(c) of the GST Act.

It provides 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.

'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.

You advised that the dietician's group lectures are generally accepted in the dietician profession as being necessary for the appropriate treatment of the people who attend the lectures - obese people. Therefore, where you supply group lectures given by an accredited dietician employed by you to an obese person, the requirement at paragraph 38-10(1)(c) of the GST Act will be satisfied where the dietician assesses the person's state of health and determines that the lecture is an appropriate form of treatment for the person. Under such circumstances, you will make a GST-free supply of a medical service under subsection 38-7(1) of the GST Act, as you will satisfy all of the requirements of that provision.

There are no provisions in the GST Act under which your supply of the service will be GST-free other than subsection 38-7(1) and subsection 38-10(1) of the GST Act.

Where the supply of the service is GST-free under subsection 38-7(1) or subsection 38-10(1) of the GST Act, the supply will not be a taxable supply, and therefore, GST will not be payable.

Where medicare benefit is not payable and the dietician does not assess the obese person's state of health and determine that the lecture is an appropriate form of treatment for the person, your supply of the services will not be GST-free. Under such circumstances, you will make a taxable supply as all of the requirements of section 9-5 of the GST Act will be satisfied. Therefore, under such circumstances, GST will be payable.

Where the lecture is not part of a particular attendee's treatment plan, GST will be payable on your supply of the lecture to that person unless medicare benefit is payable. In these cases, the appropriate treatment requirement in paragraph 38-10(1)(c) of the GST Act is not satisfied because the dietician has not assessed the obese person's state of health and determined that the lecture is an appropriate form of treatment for the person.

Question 9

Your supplies of services to a certain organisation, such as case conferencing and phone calls, that do not involve direct patient contact satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply these services for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

Medicare benefit is not payable for the services you supply to a certain organisation, such as case conferencing and phone calls that do not involve direct patient contact. Additionally, these supplies are not made by or on behalf of a medical practitioner or approved pathology practitioner. Therefore, your supplies of these services are not GST-free supplies of medical services under subsection 38-7(1) of the GST Act.

A certain organisation is the recipient of your supply in these circumstances and these services are not for the treatment of that supply recipient. Therefore, the requirement of paragraph 38-10(1)(c) of the GST Act will not be satisfied. Hence, your supplies of these services are not GST-free supplies of other health services under subsection 38-10(1) of the GST Act.

There are no other provisions of the GST Act or any other Act under which your supplies of these services are GST-free.

Therefore, as all of the requirements of section 9-5 of the GST Act are satisfied, GST is payable on these supplies.

Question 10

There is nothing in the GST Act that requires you to do so.

There is nothing in the GST Act that prohibits you from doing so. If you did so, this would not contravene the GST Act.

However, whether you do so is a contractual matter between you and your customers to determine and the ATO cannot get involved in contractual matters.

Where you have not previously remitted GST to the ATO in respect of amounts received by you for the supply of your services, you will need to amend the relevant activity statements to reflect the GST payable or alternatively, you may make the corrections in your next activity statement.

You do not need to make these revisions in respect of unpaid GST where 4 years have passed since the GST liability became payable. Any unpaid GST liabilities cease to be payable to the ATO 4 years after they became payable by you.

This means that you will not have to correct errors in your activity statements for the certain period and earlier tax periods.

The fact that your customers may be entitled to input tax credits for the relevant GST amounts (in which case, there is no net GST revenue for the ATO) will not prevent you from having GST liabilities in respect of the relevant transactions.