Private ruling: GST and music therapy sessions
Date of advice: 5 March 2021
Published: April 2021
Ruling period: 27 July 20XX to 1 July 20XX
Date scheme commenced: 27 July 20XX

Ruling: Q1: Are your supplies of music therapy sessions to NDIS participants, GST-free supplies under section 38-38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, to the extent that you supply music therapy sessions to early childhood aged NDIS participants and to NDIS participants in a residential care setting, your supplies of music therapy sessions are GST-free under section 38-38 of the GST Act.

Relevant facts and circumstances: You are a sole trader and run a private practice providing "in-home" music therapy for people with disabilities. You are a registered music therapist with the Australian Music Therapy Association. The "in-home" sessions include sessions at residential premises, supported living accommodation and nursing homes. Your income is in excess of the GST registration turnover threshold and you are registered for goods and services tax (GST). Your clientele comprises of children and adults with disabilities. All your clients hold an active NDIS plan. Music therapy is listed as one or more reasonable and necessary supports in all your clients' NDIS plan. There are written service agreements between you and your individual clients which identifies the client (name and NDIS no.) and the service to be supplied (when, where, cost, etc.). The NDIS participants you provide services to vary in ages from 3 years old to 56 years. You currently provide music therapy to individuals on a one-on-one basis. You do not provide music therapy in groups. You provide music therapy to early childhood aged NDIS participants in their own homes and to older NDIS participants in their own homes. You also provide music therapy to NDIS participants who live in supported independent living and a nursing home. You do not receive any government funding directly from the government. All your income from providing music therapy services is derived from NDIS payments. No Medicare benefit is payable for the music therapy services you provide. You have provided the following information in relation to music therapy: • A research-based practice and profession in which music is used to actively support people as they strive to improve their health, and wellbeing through the clinical use of music interventions. • A recognised allied health profession. • The Australian Music Therapy Association (AMTA) is a member organisation of Allied Professional Health Australia (AHPA). • Music therapists must have a Bachelor or Masters degree in music therapy from an AMTA credited university training course. • Music therapists are required to abide by the AMTA code of ethics and complete regular continuing professional development to maintain their registration. • Music therapists perform a detailed assessment for each client, documentation after each therapy session, and provide annual reports for NDIS reviews. Music therapists used both quantitative and qualitative methodologies and standardised reporting procedures commonly used within allied health settings. • Evidence-based practice recognised by the NDIS as a reasonable and necessary support under capacity building - Improved Daily Living. • Therapists must hold a current police check and all relevant DCSI clearances for their field of speciality. You are aware of section 38-38 of the GST Act which provides that the supply of disability support provided to NDIS participants is GST-free where certain requirements are met. You would like the ATO to determine if the music therapy sessions you supply are GST-free under section 38-38 of the GST Act.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 (GST Act) section 38-38.

Reasons for decision: Summary: Section 38-38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that certain supports provided to NDIS participants are GST-free. Section 38-38 of the GST Act states as follows: 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. (* denotes a defined term in section 195-1 of the GST Act). You have told us that all your clients have an NDIS plan in effect and that music therapy is one of the reasonable and necessary supports that are specified in the statement of supports in your client's NDIS plan. You have also told us that there is a written agreement between you and your clients who are all NDIS participants. Given this to be the case, your supply of music therapy will meet the requirements of paragraphs 38-38(a), (b) and (c) of the GST Act. It therefore remains to be determined if your supply of music therapy meets the requirements of paragraph 38-38(d) of the GST Act. For your supply to meet this requirement, it needs to be covered by one of the schedules in the GST-free Supply (National Disability Insurance Scheme Supports) Determination 2017 (NDIS Determination). The NDIS Determination applies to supplies made on or after 1 July 2017 but before 1 July 2021. The NDIS Determination contains two schedules: • Schedule 1 - supplies of supports that are GST-free. • Schedule 2 - supplies of supports that are GST-free if they are listed in other determinations. If your supply is covered by an item listed in Schedule 1, the requirement to be covered by the NDIS Determination is satisfied. If Schedule 1 doesn't apply, you can consider Schedule 2. When an item in Schedule 2 is relevant to your supply, the requirement to be covered by the NDIS Determination is only satisfied if the item is also covered by one of three other determinations. | Detailed Reasoning - Schedule 1: The supplies covered by Schedule 1of the NDIS determination are: 1. Specialist Disability Accommodation and accommodation or 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 or 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. In relation to your music therapy sessions, the only item listed in Schedule 1 which is applicable is item 8 being "early intervention supports for early childhood". The Explanatory Statement to the NDIS Determination provides further explanation for item 8 as follows: | Detailed Reasoning - Description: 8. Early intervention supports for early childhood Specialised group early childhood interventions Group multidisciplinary early childhood interventions and family focussed information and training. Transdisciplinary early childhood interventions Transdisciplinary early childhood interventions and individual/ family focussed information and training. Specialised individual therapy for early childhood Specialised individual therapy for children with Autism. Therefore, where your supply of music therapy is provided to early childhood aged NDIS participants in accordance with the above table, such supplies would be GST-free where all the other requirements of paragraphs 38-38(a), (b) and (c) are met. Your supplies of music therapy provided to other than early childhood aged NDIS participants is not covered by Schedule 1 of the NDIS Determination. Therefore, we need to consider if this supply falls under Schedule 2 of the NDIS Determination. | Detailed Reasoning - Schedule 2: If your supply is not covered by Schedule 1, the supply is only covered by the NDIS Determination if it is both : • listed in Schedule 2, and • listed in any one of three other determinations: - Schedule 1 to the GST-free Supply (Care) Determination 2017 (Care Determination), - Section 6 of the A New Tax System (Goods and Services Tax) (GST-free Supply - Residential Care - Government Funded Supplier) Determination 2015 (Residential Care Determination), or - Sections 6 or 7 of the GST-free Supply (Health Services) Determination 2017 (Health Services Determination). The supplies listed in Schedule 2 are: 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 and training. 4. Behavioural support and therapeutic supports. 5. Home modifications. Examples of supplies that are both covered by Schedule 2 and one of the other three determinations are provided in Table 1 below. | Detailed Reasoning - Examples of supplies covered by Schedule 2 and one of the three other determinations: 1. Assistance with daily personal activities Care Determination Personal care Medication management Continence management Training in use of aids and appliances 2. Specialised assessment and development of daily living and life skills, including community participation Care Determination Counselling Training in use of aids and appliances Day care Assessment of person's care needs Individual care planning or case management 2. Specialised assessment and development of daily living and life skills, including community participation Residential Care (Government Funded) Determination Social activities in a residential care setting Recreational therapy in a residential care setting 3. Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training Care Determination Basic equipment for social support (sale or hire) Provision and monitoring of personal alert systems (sale or hire) Assessment of person's care needs Training in use of aids and appliances 3. Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training Residential Care (Government Funded) Determination Goods to assist with toileting and incontinence management in a residential care setting (sale or hire) Furnishings in a residential care setting (sale or hire). 4. Behavioural support and therapeutic supports Care Determination Counselling Personal care Community paramedical services Individual care planning or case management 4. Behavioural support and therapeutic supports Residential Care (Government Funded) Determination Treatment and procedures in a residential care setting Support for people with a cognitive impairment in a residential care setting Emotional support in a residential care setting Rehabilitation support in a residential care setting 5. Home modifications Care Determination Home modifications which are supplies that assist a person to remain living at home The items in Table 1 that music therapy may qualify under is Items 2 and 4 of Schedule 2. From Table 1 there are two instances where Item 2 and item 4 meet both Schedule 2 and one of the three determinations. The provision of music therapy sessions does not meet the first Item 2 of Table 1 as it is not the provision of "Counselling, training in the use of aids and appliances, day care, assessment of persons care needs and individual care planning or case management". The provision of music therapy sessions does not meet the first Item 4 of Table 1 as it is not the provision of "Counselling, personal care, community paramedical services and individual care planning or case management" To meet the requirement of the remaining Item 2 and Item 4 of Table 1, you are required to provide the music therapy sessions in a residential care setting. In the case of your clients who are other than early childhood aged NDIS participants, your supply of music therapy sessions to them will only meet the requirement of paragraph 38-38(d) of the GST Act where it is provided in a residential care setting. Therefore, to the extent that you provide music therapy sessions to other than early childhood aged NDIS participants in a residential care setting, and the requirements of paragraphs 38-38(a), (b) and (c) are also met, your supply of music therapy to other than early childhood aged NDIS participants will be GST-free.