Edited version of private advice

Authorisation Number: 1052088447563

Date of advice: 17 February 2023

Ruling

Subject: GST and other health services

Question

Does Entity A make a GST-free supply pursuant to section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in relation to its supply of psychological assessments by qualified and registered psychologists to child or adult students?

Answer

Yes, Entity A makes a GST-free supply pursuant to section 38-10 of the GST Act in relation to its supply of psychological assessments by qualified and registered psychologists to child or adult students.

This ruling applies for the following periods:

17 February 20XX to 30 June 20XX

The scheme commences on:

17 February 20XX

Relevant facts and circumstances

Entity A is an Australian not-for-profit entity and has been registered for GST.

Entity A provides a variety of services to support children and adults with learning difficulties and specific learning disorders in Australia.

In undertaking its operations, Entity A make supplies of psychological assessments to child or adult students. These psychological assessments are conducted by qualified and registered psychologists who are employees of Entity A.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-10(1)

A New Tax System (Goods and Services Tax) Act 1999 Section 195-1

Reasons for decision

Subsection 38-10(1) of the GST Act outlines the requirements for a supply of 'other health services' to be treated as GST-free and states:

(1)  A supply is GST-free if:

(a)  it is a service of a kind specified in the table in this subsection, or of a kind specified 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 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.

Psychology is included at item 16 of the table to subsection 38-10(1) of the GST Act. Entity A has determined that the psychological assessments it undertakes are a supply of psychology services. Therefore, paragraph 38-10(1)(a) of the GST Act is met.

A "recognised professional" is defined in section 195-1 of the GST Act. To the extent that the psychological assessments are conducted by a recognised professional as defined in section 195-1 of the GST Act, which in this case would be qualified and registered psychologists, paragraph 38-10(1)(b) of the GST Act is met.

Paragraph 38-10(1)(c) of the GST Act requires that the supply by Entity A of the psychological assessments, must be generally accepted in the psychology profession as necessary for the appropriate treatment of the recipient of the supply.

Issue 2.a. of the Health Industry Partnership - issues register sets out the Commissioner's view on 'appropriate treatment':

It is considered that 'appropriate treatment' will be established where the recognised professional 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 that recipient [emphasis added] insofar as that *recognised professional's particular area of training allows and will include subsequent supplies for the determined process.

Entity A has determined that the psychological assessments it conducts are generally accepted in the psychology profession as appropriate treatment for children and adults with learning difficulties and specific learning disorders. Entity A explains that this is further supported by the fact that there are numerous organisations in Australia that supply psychology services which also utilise similar psychological assessments.

Entity A has also determined that the psychological assessments are appropriate treatment as they have the purpose of assessing the student's state of health and determining a process to preserve, restore or improve the psychological wellbeing of the student through recommendations and strategies included in the comprehensive report provided.

Paragraph 38-10(1)(c) of the GST Act provides that a supply is only GST-free where an individual receiving that service or specific health treatment is the recipient of that supply.

Paragraph 156 of Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) provides that in some fiduciary relationships it may be necessary for one party to give consent to the supply of a health service for another party. For example, a custodial parent gives consent for the medical treatment of a child. The Commissioner accepts in these circumstances that the other party, the child, is the recipient of the supply.

Therefore, where Entity A is engaged by a parent to provide the psychological assessments to their child, the recipient of the supply will be the child by virtue of the fiduciary relationship between the parent and the child. In addition, where Entity A is engaged by the adult to supply the psychological assessments to the adult, the adult will be the recipient of the supply. Based on the above, paragraph 38-10(1)(c) of the GST Act is also met.

As all three requirements of subsection 38-10(1) of the GST Act are met, the supply of psychological assessments by Entity A will be GST-free supplies of other health services.