Private ruling: Health services
Published: January 2013

Ruling: Q1: Am I required to be registered for the GST? Are the counselling services I provide GST-free? | A1: Yes, you are required to be registered for the GST. No, the counselling services you provide are not GST-free.

Relevant facts and circumstances: You are engaged in an enterprise in the health industry. You are not registered for the goods and services tax (GST). Your current turnover is less that $75,000. However, your projected turnover is expected to be over $75,000. You provide counselling services relating to children. You also provide play therapy to children. Play therapy is used to treat a range of children's emotional and behavioural problems. It is a form of psychotherapy/counselling for a wide range of childhood emotional, behavioural, social and psychological difficulties. You have membership with the Psychotherapists and Counsellors Association of Western Australia (PACAWA) as a clinical associate. The services you provide are recognised by PACAWA as well as other professional associations such as Australian Community Workers Association (ACWA) and Australasia Pacific Play Therapy Association (APPTA), of which you are a member. You are not registered as a psychologist and you do not provide services as a psychologist anywhere in Australia. However, you receive clinical supervision for your work by an overseas clinical psychologist and also by an Australian based registered psychologist.

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: Detailed Reasoning - Registration: Under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you are required to be registered under this Act if you are carrying on an enterprise and your GST turnover meets the registration turnover threshold. Subsection 23-15(1) of the GST Act states that, if you are a non-profit body, your registration turnover threshold is $50,000 or such higher amount as the regulations specify. Regulation 23-15.01 of the A New Tax System (Goods and Services Tax) Regulations 1999 (Regulations) specifies that the registration turnover threshold for a non-profit body is $75,000. Paragraph 188-10(1)(b) of the GST Act states that you have a GST turnover that meets a particular threshold if your projected GST turnover is at or above the turnover threshold. You informed us that your current turnover is less than $75,000, but your projected turnover will be $75,000 or over. Therefore, you meet the registration turnover threshold and you are required to be registered for the GST. | Detailed Reasoning - Health Services: Under section 38-10 of the GST Act, a supply is GST-free if all of the following are satisfied: 1. it is a service of a kind specified in the table in this section, or of a kind specified in the regulations, and 2. the supplier is a recognised professional in relation to the supply of the service of that kind, and 3. 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. | Detailed Reasoning - Counselling services and Play therapy: To qualify as a service of a kind specified in the table in section 38-10 of the GST Act (Table), the service must be the provision of one of those actual services listed and not just similar to one of those services. The list must be strictly interpreted as the actual service listed in the Table and not something similar to one of the services. It is to be noted that if the list is not required to be strictly interpreted, there is no necessity, for example, to include audiometry alongside audiology under item 3 in the Table. Thus, we interpret the Table in this section strictly, based only on the items listed therein. In this case you are providing counselling and play therapy services. Neither 'counselling services' nor 'play therapy' are listed in the Table. Therefore the 'counselling services' and 'play therapy' are not GST-free. | Detailed Reasoning - Psychotherapy services: You informed us that the services you provide are a form of psychotherapy. Psychotherapy and psychoanalysis are not services of a kind specified in the Table. However, psychotherapy and psychoanalysis may be considered to be techniques of one or more services listed in the Table. If the psychotherapy is supplied by a recognised professional in relation to one of the listed services in the Table, for example psychology, and it is generally accepted in that profession as being necessary for the appropriate treatment of the recipient of the supply, then it will be GST-free, provided it also satisfies the point No 3 given above. Psychology is listed in the Table as item 16. Therefore psychotherapy may be considered as a technique used in the provision of psychology, which is specified in the Table. However, these services must be supplied by a recognised professional and considered as necessary for the appropriate treatment of the recipient of the supply. The definition of a 'recognised professional' is provided in section 195-1 of the GST Act as a person who is a recognised professional in relation to the supply of the service of a kind specified in the Table if 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 a Territory law prohibiting the supply of services of that kind without such permission, approval or registration. It is considered that 'prohibiting' includes a law which does not allow a person to hold themselves out as a provider of certain services as governed by that law. Under the relevant State and Territory Acts dealing with psychology, a practitioner of psychology must be registered under that relevant Act. Therefore, it is considered that only a person registered for the provision of psychology under the relevant Acts will be a recognised professional in relation to psychology. You advised that you are not registered for the provision of psychology services in any State of Territory in Australia. Therefore, you are not a 'recognised professional' in relation to the supply of psychology, and thus, by extension, to the supply of psychotherapy techniques. Thus, the supplies you make in this regard will be taxable and not GST-free. Please note that you are required to be registered for the GST and you are required to remit GST to the Australian Taxation Office (ATO) on the taxable supplies you make. We have enclosed the following ATO publications for your information. ð GST for small business ð GST and other health services

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.