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Edited version of your written advice
Authorisation Number: 1013001099124
Date of advice: 28 April 2016
Ruling
Subject: GST-free supply of energy healing services
Question
Are you making a GST-free supply under subsection 38-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when you provide energy healing services?
Answer
No, you are not making a GST-free supply under subsection 38-10(1) of the GST Act when you provide energy healing services. The supply of your energy healing services is a taxable supply under section 9-5 of the GST Act.
Relevant facts and circumstances
You provide energy healing services such as, health assessments, healing sessions, rehabilitation and tailored health programs.
The human body contains complex energy systems that influence the way you think, feel and act. Energy healing uses the body's Chi system to heal a person's mind and body.
You are registered for GST.
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 subsection 38-10(1).
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(1) table item 5.
A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-10(1)(a).
A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-10(1)(b).
A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-10(1)(c).
A New Tax System (Goods and Services Tax) Act 1999 section 195-1.
Reasons for decision
According to section 9-5 of the GST Act, where you make a supply for consideration, in the course of carrying on an enterprise, and you are registered or required to be registered for GST, the supply is a taxable supply and is subject to GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. The amount of GST payable on a taxable supply is 1/11th of the consideration for the supply.
The supply of a health service is GST-free under subsection 38-10(1) of the GST Act if:
(a) the service is of a kind specified in the table in this subsection or in the regulations; and
(b) the supplier is a recognised professional in relation to the supply of services of that kind; and
(c) the supply is generally accepted in the profession associated with the supply of services of that kind, as being necessary for the appropriate treatment of the recipient of the supply.
All of the above requirements must be satisfied for the supply of a health service to be GST-free.
Specified health service
The health services which are specified in the table in subsection 38-10(1) of the GST Act are listed below.
Health services | |
Item |
Service |
1 |
Aboriginal or Torres Strait Islander health |
2 |
Acupuncture |
3 |
Audiology, audiometry |
4 |
Chiropody |
5 |
Chiropractic |
6 |
Dental |
7 |
Dietary |
8 |
Herbal medicine (including traditional Chinese herbal medicine) |
9 |
Naturopathy |
10 |
Nursing |
11 |
Occupational therapy |
12 |
Optometry |
13 |
Osteopathy |
14 |
Paramedical |
15 |
Pharmacy |
16 |
Psychology |
17 |
Physiotherapy |
18 |
Podiatry |
19 |
Speech pathology |
20 |
Speech therapy |
21 |
Social work |
Recognised professional
According to section 195-1 of the GST Act,
'a person is a recognised professional, in relation to the supply of a service of a kind specified in the table in subsection 38-10(1) of the GST Act, if:
(a) 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 *Territory law prohibiting the supply of services of that kind without such permission, approval or registration; or
(b) the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, 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; or
(c) in the case of services covered by item 3 in the table in subsection 38-10(1) of the GST Act - the service is supplied by an accredited service provider within the meaning of section 4 of the Hearing Services Administration Act 1997.'
Generally accepted in the profession as being necessary for the appropriate treatment of the recipient of the supply
For GST purposes, appropriate treatment is considered to be established where the recognised professional assesses the patient'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 patient insofar as that recognised professional's particular area of training allows. Appropriate treatment includes subsequent supplies for the assessed process, and also includes the principles of preventative medicine.
However, appropriate treatment does not include supplies undertaken for a third party. Under certain circumstances, the recipient of the supply is considered not to be the patient undergoing the treatment, but rather, a third party for whom the services are performed, for example, an insurance company. As the supply to the third party does not encompass treatment, the supply is considered not to be appropriate treatment of the recipient of the supply. Therefore, where a third party is paying for a supply, it is necessary to determine who the recipient of the supply is.
Energy healing services
The human body contains complex energy systems that influence the way you think, feel and act. Energy healing uses the body's Chi system to heal a person's mind and body.
Energy healing is not one of the health services specified in the table in subsection 38-10(1) of the GST Act. Therefore, a supply of energy healing services by an energy healing practitioner is not GST-free in its own right.
However, the requirement in paragraph 38-10(1)(a) of the GST Act is satisfied where the supplier is supplying one of the services listed in the table in subsection 38-10(1) of the GST Act and energy healing is a standard technique or a component of the supply of that listed service. For example, 'Acupuncture', 'Chiropractic', and 'Naturopathy' are services in the table in subsection 38-10(1) of the GST Act for which energy healing, as a diagnostic technique, may be considered a component of the supply.
In these cases, the energy healing, as a component of the supply rather than as a supply in its own right, will have the same GST status as the treatment supplied as part of that supply. For example, where energy healing is used to diagnose a condition and that practitioner performs acupuncture as a treatment, the energy healing will be a component of the supply of acupuncture and will have the same GST status as the acupuncture.
In your case you are providing an energy healing service. You are not supplying any of the relevant services listed in the table in subsection 38-10(1) of the GST Act or the GST Regulations. Therefore, the requirement in paragraph 38-10(1)(a) of the GST Act is not satisfied and the supply is not GST-free under subsection 38-10(1) of the GST Act.