ATO ID 2001/663: GST and kinesiology services
Date of decision: 6 September 2001
Business line: Indirect Tax

Issue
Is the entity, a provider of natural therapies, 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 it supplies kinesiology services to a patient?

Decision
No, the entity is not making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies kinesiology services to a patient. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts
The entity is a provider of natural therapies. The entity supplies kinesiology services to a patient. The entity is not an Acupuncturist, Herbal Medicine practitioner, Chiropractor or Naturopath. The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for decision
Summary: Under subsection 38-10(1) of the GST Act, an entity makes a GST-free supply of health services if: Kinesiology is not listed in the table in subsection 38-10(1) of the GST Act or in the GST Regulations. Therefore, kinesiology, 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 kinesiology is a standard technique or a component of the supply of that listed service. For example, 'Acupuncture', 'Chiropractic', 'Herbal medicine (including traditional Chinese herbal medicine)', and 'Naturopathy' are services in the table in subsection 38-10(1) of the GST Act for which kinesiology, as a diagnostic technique, may be considered a component of the supply. In these cases, the kinesiology, 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 kinesiology is used to diagnose a condition and that practitioner performs acupuncture as a treatment, the kinesiology will be a component of the supply of acupuncture and will have the same GST status as the acupuncture. The entity in this particular case is providing a kinesiology service. The entity is 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. The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not a GST-free supply under Division 38 of the GST Act or input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it provides kinesiology services to a patient.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 Division 38 subsection 38-10(1) paragraph 38-10(1)(a) paragraph 38-10(1)(b) paragraph 38-10(1)(c) Division 40
Subject references: Goods & services tax GST free GST health section 38-10 - other health services GST supplies & acquisitions Taxable supply