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Ruling

Subject: GST and other health services

Question

Is your supply of the X program (the program) a GST-free supply?

Answer

Your supply of the program is a mixed supply that consists of taxable and non-taxable supplies as follows:

· medical consultations - GST-free

· wellness coaching - GST-free

· herbal supplements - taxable

Relevant facts and circumstances

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

You provide a program designed to assist clients in their wellbeing.

The program consists of:

· medical consultations,

· wellness coaching to change eating, living and exercise habits, and

· the sale of other proprietary products to aid in the treatment.

A client completes an exhaustive medical questionnaire which is screened by a doctor. The client will undergo various health checks including blood pressure analysis, body mass index (BMI) test, and fat percentage to give the doctor a clear understanding of the client's current health issues.

The doctor is mainly responsible for the program. He/She screens each client for suitability of the program, performs a medical consultation and prescribes medication. He/She also advises the client on the science behind the dietary program.

The client will also be referred for a blood test and ECG, the results of which will assist in the development of the program.

The client is not obliged to enrol in the program regardless of the outcome of the initial health checks and consultation with the doctor.

The first consultation is a free information session. Should the client decide not to enrol in the program, there is no cost to the patient.

A client who decides to enrol in the program signs a form acknowledging the risks involved in the program.

The doctor directs a wellness coach to design a diet and exercise plan in accordance with his/her assessment of the client

The wellness coach has an Advanced Diploma in Natural Medicine and Nutrition and is a member of a national professional association that has a uniform national registration requirement.

No component of the program qualifies for Medicare benefits. The doctor is subject to section 19AB of the Health Insurance Act 1973 which restricts access to Medicare benefits.

The program fee includes the following:

· comprehensive initial medical consultation with the doctor

· comprehensive initial consultation with the nutritionist/wellness coach

· monthly consultations with the doctor and the wellness coach

· ongoing support with nutritionist as required - included

· herbal supplements -

· blood tests and ECG if required

· bio report with interpretation - included.

The herbal supplements are not purchased, held or consumed at the premises where the doctor and the wellness coach provide their services.

A client is free to have their blood tests done at a pathologist of their choice. However, the doctor has an agreement with a pathologist for corporate pricing, saving the client the full cost of a regular blood test.

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 section 38-7

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

GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) 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.

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)

From the facts given, all the conditions of paragraphs 9-5(a) to (d) of the GST Act are satisfied as follows:

· you make the supply of the program for consideration; and

· you make the supply in the course of the enterprise that you carry on; and

· the supply is connected with Australia as the services included in the program are done in Australia and the goods are made available to the client in Australia; and

· you are registered for GST.

There is no provision in the GST Act under which your supply of the program is input taxed. What remains to be determined is whether the supply is GST-free.

As the supply of the program consists of a number of supplies, we must determine whether each of those supplies is GST-free.

Medical consultations

Section 38-7 of the GST Act provides that a supply of a medical service is GST-free.

'Medical service' is defined in section 195-1 of the GST Act as:

· a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; or

· 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.

Appropriate treatment will be established where the practitioner 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 the recipient and will include subsequent supplies for the assessed process.

While there is no Medicare benefits payable for the services of the doctor, we consider that the services he/she provides as a medical practitioner in assessing a client's state of health and determining the process to improve their wellbeing is accepted in the medical profession as being necessary for the appropriate treatment of the client. Therefore, the services provided by the doctor under the program are medical services under paragraph (b) of the definition of a medical service.

Accordingly the supply of medical consultations is GST-free under section 38-7 of the GST Act

Wellness coaching

Under subsection 38-10(1) of the GST Act, 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 recognized 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.

The wellness coach designs a diet and exercise program for a client. As the purpose of the program is to assist the client and improve their wellbeing, the wellness coach provides a health service.

The services specified in table in subsection 38-10(1) of the GST Act include dietary services (item 7) and naturopathy services (item 9). Thus, the services that the wellness coach provides satisfy the requirement in paragraph 38-10(1)(a) of the GST Act.

The wellness coach has an Advanced Diploma in Natural Medicine and Nutrition and is a member of a national professional association that has uniform national registration requirements. As such, we consider that the wellness coach is a recognized professional in relation to the supply of his/her services. The requirement in paragraph 38-10(1)(b) of the GST Act is also satisfied.

The wellness coach designs the diet and exercise program in accordance with the assessment made by the doctor of the client's state of health so that the client receives the appropriate treatment they need. Therefore, we consider that the services provided by the wellness coach would generally be accepted as being necessary for the appropriate treatment of the recipient of the supply. Accordingly, the requirement in paragraph 38-10(1)(c) of the GST Act is also satisfied.

As all the requirements in subsection 38-10(1) of the GST Act are satisfied, the supply of wellness coaching is GST-free.

Herbal supplements

According to subsection 38-10(3) of the GST Act, a supply of goods is GST-free if:

· it is made to a person in the course of supplying to the person a service that is GST-free under subsection 38-10(1) of the GST Act (other than a service referred to in item 8, 9, 12 or 15 of the table in that subsection); and

· it is made at the premises at which the service is supplied.

Subsection 38-10(4) of the GST Act further provides that a supply of goods is GST-free if:

· it is made to a person in the course of supplying to the person a service referred to in item 8 or 9 of the table in subsection 38-10(1) of the GST Act; and

· it is supplied, and used or consumed, at the premises at which the service is supplied.

You advised that the supplements are not purchased, held or consumed at the premises at which the doctor and the wellness coach provide their services. Therefore, the supply of the supplements is not GST-free under subsection 38-10(3) or 38-10(4) of the GST Act. The supply is a taxable supply.

Blood tests and ECG

You advised that the client is referred for a blood test and ECG, the results of which will assist in developing the program. The program fee covers the cost of these tests.

A service performed as a result of referral by a medical practitioner is not a component of the supply being provided by the referring practitioner. Therefore, you do not make a supply of service in relation blood tests and ECG.

Although the program fee covers the cost of the blood test and ECG (if required), we consider that you only act as either a collecting agent for the other medical practitioner or a paying agent for the client.

Where the blood test or ECG is not required and the portion of the program fee is applied to another supply that you make to the client, that portion of the program fee becomes part of the consideration for the other supply.