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Edited version of private advice
Authorisation Number: 1012618306080
Ruling
Subject: GST and supply of antenatal classes
Question
Is your supply of antenatal classes a GST-free supply?
Answer
Yes, your supply of antenatal classes is a GST-free supply.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You supply antenatal classes which are attended by expectant mothers and their partners.
The antenatal classes cover topics associated with birthing.
Part of the antenatal classes is a practical birth skills session that includes instruction on, amongst other things, relaxation and breathing awareness, birth ball positions, massage, TENS demonstration, effective pushing techniques and pelvic floor exercises.
The antenatal classes are run directly by registered midwives who are employed by you. A physiotherapist delivers the practical birth skills session under the supervision of the midwives.
The antenatal classes are generally accepted in the medical profession as being necessary for the appropriate care of expectant mothers. Patients are not specifically referred to a class or the classes run by you; however, the obstetrician or midwife would recommend that attending the class would be beneficial. The vast majority of your patients who were advised to attend an antenatal class would attend the classes that you supply.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 and
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(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:
(a) you make the supply for *consideration; and
(b) the supply is made in the course of furtherance 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.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
(* denotes a term defined under section 195-1 of the GST Act)
Your supply of the antenatal classes is made for consideration and in the course of carrying on your enterprise. The supply is connected with Australia as the classes are held in Australia. You are registered for GST. The requirements in paragraphs 9-5(a) to 9-5(d) of the GST Act are satisfied. Therefore, your supply of the antenatal classes is a taxable supply unless it is GST-free or input taxed.
There is no provision in the GST Act under which your supply of the antenatal classes would be input taxed. What is left to determine is whether the supply of the antenatal classes is GST-free.
GST-free supply of other health services
A supply is GST-free if:
(a) it is a service of a kind specified in the table in subsection 38-10(1) of the GST Act or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 1999; and
(b) the supplier is a recognised professional in relation to the supply of services of that kind; and
(c) 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 antenatal classes that you supply are run by midwives together with a physiotherapist. As such, it is considered that the antenatal classes are a supply of nursing and physiotherapy services. Nursing and physiotherapy services are specified in the table is subsection 38-10(1) of the GST Act as item 10 and item 17 respectively. The requirement in paragraph (a) above is satisfied.
The midwives who run the antenatal classes are registered midwives. The physiotherapist conducts the practical birth skills session under the supervision of the midwives. As such, it is considered that the antenatal classes are supplied by recognised professionals. The requirement in paragraph (b) above is satisfied.
While the patients are not specifically referred to attend the antenatal classes that you supply, obstetricians and midwives recommend that attending such classes would be beneficial. Based on the information that you provided, the antenatal classes that you supply not only cover topics associated with birthing but also includes practical birth skills session (relaxation and breathing awareness, massage, TENS demonstrations, and others) which is specifically directed to the needs of expecting mothers. As such, it is considered that the supply of the antenatal classes would generally be accepted, in nursing and physiotherapy professions, as being necessary for the appropriate treatment of the recipient of the supply. The requirement in paragraph (c) above is satisfied.
As all the requirements of a GST-free supply of other health services are satisfied, your supply of antenatal classes is a GST-free supply.