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Edited version of your written advice
Authorisation Number: 1013059609796
Date of advice: 26 July 2016
Ruling
Subject: Supplies of low level laser therapy
Question 1
Is the supply of laser therapy a medical service supply under section 38-7 of the GST Act, section 38-10 of the GST Act or any other relevant section that meets the definition of a GST-free supply?
Answer
No, the supply of laser therapy is not a GST-free supply.
Relevant facts and circumstances
You operate a wellness and pain clinic. You are currently not registered for GST.
The director of the corporate trustee is a registered pharmacist, member with a pharmaceutical society and Australian Health Practitioner Regulation Agency. Treatment for patients will include laser therapy (LT).
LT is a treatment that utilizes specific wavelengths of light to interact with tissue and is thought to help accelerate the healing process. It can be used on patients who suffer from a variety of acute and chronic conditions in order to help eliminate pain, swelling, reduce spasms and increase functionality. LTs target the soft tissue deep in the problem areas and stimulating the production of collagen cells which assist the healing process. Some examples below of the uses for treatment include:
* Migraines
* Neck pain
* Lower back pain
* Tinnitus
* Chronic fatigue
* Sports injuries
* Digital fatigue
You have referred to Class Ruling CR 2013/14 - Item 945 (CR 2013/14) as support for the LT being treated as GST-free.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Div 38.
Reasons for decision
Under subsection 38-7(1) of the GST Act, a supply of a 'medical service' is GST-free.
Section 195-1 of the GST Act defines a 'medical service' to mean:
● a service for which a 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.
There is no medicare benefit payable for the LT. As such, the procedure does not fall within the first limb of the definition of medical service in section 195-1 of the GST Act.
You are not a medical practitioner or an approved pathology practitioner nor are you supplying a service on their behalf. Therefore, LT is not a 'medical service' under the second limb of section 195-1 of the GST Act.
Under subsection 38-10(1) of the GST Act, an entity makes a GST-free supply of health services if:
● it provides 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 (GST Regulations) (paragraph 38-10(1)(a) of the GST Act); and
● the entity is a recognised professional in relation to the supply of services of that kind (paragraph 38-10(1)(b) of the GST Act); 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 (paragraph 38-10(1)(c) of the GST Act).
LT is not listed in the table in subsection 38-10(1) of the GST Act or in the GST Regulations. Therefore, LT, in itself, does not satisfy the requirement in paragraph 38-10(1)(a) of the GST Act.
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 LT is a standard technique or a component of the supply of that listed service.
For example, ‘Dental’ is a service in the table in subsection 38-10(1) of the GST Act for which LT, as a form of anaesthesia, sedation and relaxation therapy, may be considered a component of the supply (See CR 2013/14). In that case, the LT, as a component of the dental 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.
You are providing an LT service. You are not supplying the LT as part of 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.
There are no other provisions in the GST Act that would make your supply of LT GST-free.
You are currently not registered for GST. You will need to determine whether your GST turnover meets or exceeds either the current or projected turnover thresholds. Alternatively, you may choose to register for GST voluntarily.