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Ruling

Subject: Supply of health services

Question:

Are the counselling, psychotherapy, and report writing services you provide to your clients GST-free?

Answer:

No. The counselling, psychotherapy, and report writing services you provide to your clients are not GST-free.

This ruling applies for the following periods:

Not applicable

The scheme commences on:

Not applicable

Relevant facts and circumstances

You are engaged in an enterprise in the health industry and practice under a corporate entity.

You are registered for the goods and services tax (GST).

You provide counselling and psychotherapy services to your clients.

You are a member of the Australian Counselling Association.

You are not registered as a psychologist and you do not provide services as a psychologist anywhere in Australia.

You provide similar services to those provided by psychotherapists and the approach you take and the training you have had are the same.

In essence the services you provide to your clients are similar to those provided by psychologists.

However, you are not allowed to state that your services are the same as those provided by psychologists as you do not have registration to practice as a psychologist. Also, you do not have access to certain rebates and services and, access to and administration of certain tests and assessments.

Your role focuses on short term (counselling) and longer-term (psychotherapy) therapeutic services, specializing in sex, relationships and generalist issues.

Relevant legislative provisions

Section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

Reasons for decision

Under section 38-10 of the GST Act, a supply is GST-free if all of the following are satisfied:

· It is a service of a kind specified in the table in this section, or of a kind specified in the regulations, and

· the supplier is a recognised professional in relation to the supply of the service 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.

Counselling services

To qualify as a service of a kind specified in the table in section 38-10 of the GST Act (Table), the service must be the provision of one of those actual services listed and not just similar to one of the services. The list must be strictly interpreted as the actual service listed in the Table and not something similar to one of the services. Item 3 in the list in the Table is "Audiology, audiometry". It is to be noted that if the list is not required to be strictly interpreted, there is no necessity to include audiometry alongside audiology. Thus, we interpret the Table in this section strictly, based only on the items listed therein.

In this case you are providing counselling and psychotherapy services and report writing with regards to those services.

Counselling is not listed in the Table. Therefore the counselling services and report writing on that service are not GST-free.

Psychotherapy services

Psychotherapy and psychoanalysis are not services of a kind specified in the Table. However, psychotherapy and psychoanalysis may be considered to be techniques of one or more services listed in the Table. If the psychotherapy is supplied by a recognised professional in relation to one of the listed services in the Table, 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 point No 3 given above.

Psychology is listed in the Table as item 16. Therefore psychotherapy (and the report writing associated with it) may be considered as a technique used in the provision of psychology, which is specified in the Table. 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 as a person who is a recognised professional in relation to the supply of the service of a kind specified in the Table if the service is supplied in a State or Territory in which the person has 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. 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 advised that you are not registered for the provision of psychology services in any State of Territory in Australia. Therefore, you are not a "recognised professional" in relation to the supply of psychology, and thus, by extension, for to supply of psychotherapy techniques and report writing thereof.

As you do not satisfy the requirement of a recognised professional, the services of psychotherapy techniques and report writing in respect of those services you provide, are not GST-free.