Edited version of private advice

Authorisation Number: 1052180127940

Date of advice: 19 October 2023

Ruling

Subject: GST and supply of other health services

Question 1

Is your supply of health services to individuals GST-free under section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

Question 2

Were you required to register for GST during the financial year ending 30 June 2023?

Answer

Yes.

This ruling applies for the following period:

12 October 2023 - 11 October 2027

Relevant facts and circumstances

You are a recognised professional registered with the Australian Health Practitioner Regulation Agency (AHPRA).

You supply your services to individuals in the form of therapy. The therapy would generally be accepted in the profession associated with supplying the service as being necessary for the appropriate treatment of the individuals.

You deal directly with the individuals which include those who make Workcover claims against their employers. In such cases, your services are paid for by the insurers.

You also supply your services to NDIS participants under a written agreement with them. In such cases, your services are paid for by the participants or their plan manager through the NDIS funding.

During the financial year ending 30 June 2023 (FY 2022-23), your current GST turnover at a time during any given month exceeded $75,000; however, you thought that you were not required to register for GST as the bulk of your services do not attract GST.

You registered for GST from 1 July 2023.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 23-5

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

A New Tax System (Goods and Services Tax) Act 1999 section 188-10

Reasons for decision

1.   Subsection 38-10(1) of the GST Act provides that 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.

The services that you supply is specified in the table in subsection 38-10(1) of the GST Act; thus, paragraph 38-10(1)(a) is satisfied.

You are a recognised professional in relation the services that you supply; therefore, paragraph 38-10(1)(b) is satisfied.

The therapy that you provide would generally be accepted in the profession associated with supplying the services as being necessary for the appropriate treatment of the individuals. As you supply your services directly to the individuals, they are the recipient of the supply. 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, your supply of health services to the individuals is GST-free.

Supplies to NDIS participants

Section 38-38 of the GST Act provides that a supply is GST-free if the supply:

a.    is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013) for whom a participant's plan is in effect under section 37 of that Act; and

b.    is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and

c.     is made under a written agreement, between the supplier and the participant or another person; that:

                      i.         identifies the participant; and

                     ii.        states that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and

d.    is of a kind that the Disability Services Minister has determined in writing.

For the purposes of paragraph 38-38(d) of the GST Act, a supply of a kind referred to in the following table is determined by the Minister under the A New Tax System (Goods and Services Tax) (GST-free Supply - National Disability Insurance Scheme Supports) Determination 2021.

Supplies of supports

Item Kind of supply

1 Specialist disability accommodation (within the meaning of the National Disability Insurance Scheme rules) and accommodation/tenancy assistance

2 Assistance in coordinating or managing life stages, transitions and supports, including daily tasks in a group or shared living arrangement

3 Household tasks

4 Assistance with and training in travel/transport arrangements, excluding taxi fares

5 Interpreting and translation

6 Assistance to access and maintain education and employment

7 Assistive equipment for recreation

8 Early intervention supports for early childhood

9 Management of funding for supports in a participant's plan

For the purposes of paragraph 38-38(d) of the GST Act, a supply of a kind:

1. referred to in the following table is determined; and

b.    covered by any of the following:

                      i.        Schedule 1 to the GST-free Supply (Care) Determination 2017;

                     ii.        section 6 of the A New Tax System (Goods and Services Tax) (GST-free Supply - Residential Care - Government Funded Supplier) Determination 2015;

                    iii.        section 6 or 7 of the GST-free Supply (Health Services) Determination 2017;

                    iv.        any later replacement determination, as in force from time to time that has been made for the purposes of section 38-15, 38-25 or 38-30 of the GST Act.

Supplies of supports covered by other determination

Item Kind of supply

1 Assistance with daily personal activities

2 Specialised assessment and development of daily living and life skills, including community participation

3 Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up training

4 Behavioural support and therapeutic supports

5 Home modifications

As your supply of health services is GST-free under section 38-10 of the GST Act, it is no longer necessary to determine if it is GST-free under section 38-38 merely on the basis that the payment for your services comes from the NDIS funding of the individual. As long as the arrangement for the supply of your services is with the individuals receiving the therapy, the supply would be GST-free under section 38-10.

Supplies in settlement of insurance claims

Subsection 38-60(1) of the GST Act provides that if:

(a) a supply is a supply of a service to an insurer; and

(b) the service is the supplier making one or more other supplies of goods or services to an individual; and

(c) at least one of the other supplies is:

(i) wholly or partly *GST-free under Subdivision 38-B of the GST Act; and

(ii) for settling one or more claims under an insurance policy of which the insurer is an insurer;

the first mentioned supply is GST-free to the extent that the other supplies mentioned in paragraph (b) are GST-free under Subdivision 38-B.

As the arrangement for the supply of your services is with the individuals receiving the therapy, subsection 38-60(1) of the GST Act does not apply despite the payment for your services being made by the insurer. Your supply of psychology services is GST-free under section 38-10 of the GST Act.

Where the arrangement for the supply of your services is with the insurer, the supply would not be GST-free under section 38-10 of the GST Act. The supply would be GST-free under subsection 38-60(1) provided all the other requirements in the subsection are met.

Where the arrangement for the supply of your services is with the employer of the individual receiving the therapy, the supply would not be GST-free under section 38-10 or subsection 38-60(1) of the GST Act. The supply would be a taxable supply under section 9-5 of the GST Act.

2.   Requirement to register for GST

In accordance with section 23-5 of the GST Act, an entity is required to be registered for GST if:

(a) the entity is carrying on an enterprise; and

(b) the entity's GST turnover meets the registration turnover threshold.

You were carrying on an enterprise during the FY 2022-23; thus, what remains to be determined is whether your GST turnover met the registration turnover threshold

Currently, the registration turnover threshold is $75,000.

An entity's GST turnover meets a particular turnover threshold if:

a.   its current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that its projected GST turnover is below the turnover threshold; or

b.   its projected GST turnover is at or above the turnover threshold.

Current GST turnover at a time during a particular month is the sum of the values of all the supplies made, or are likely to be made, during the 12 months ending at the end of that month.

Projected GST turnover at a time during a particular month is the sum of the values of all the supplies made or are likely to be made during that month and the next 11 months.

In working out the current and projected GST turnover, the following are excluded:

•         supplies that are input taxed

•         supplies that are not for consideration

•         supplies that are made in connection with the enterprise carried on

•         supplies that are not connected with Australia.

GST-free supplies are not excluded in working out the current and projected GST turnover.

You advised that your current GST turnover at a time during any of given month in the FY 2023-23 exceeded $75,000. You did not register for GST as the bulk of your turnover is not subject to GST.

As GST-free supplies are not excluded in working out your GST turnover, those supplies will not reduce your turnover that will result in not meeting the registration turnover threshold. Therefore, you were required to register for GST during the FY 2022-2023.