Private ruling: GST and exercise physiology for NDIS participants
Date of advice: 9 February 2024
Published: 15 April 2024
Ruling period: DD MM 20YY to DD MM 20YY

Ruling: Q1: Is the supply of exercise physiology services to NDIS participants GST-free under Subdivision 38-B of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Exercise physiology is not a GST-free health service in its own right under subsection 38-10(1) of the GST Act. However, where a Medicare benefit is payable for the supply of an exercise physiology service, the supply is GST-free under section 38-7 of the GST Act. The supply of exercise physiology services to NDIS participants is GST-free under section 38-38 of the GST Act where: AND

Relevant facts and circumstances: You carry on a business of providing exercise physiology services to various clients including participants in the National Disability Insurance Scheme (NDIS). You provide the services at your clinic and in care recipients' own homes. You are registered for goods and services tax (GST) and lodge GST returns on a quarterly basis. You currently pay GST on all private exercise physiology sessions (not funded by Medicare, NDIS etc). For the past two and a half years you have also paid GST on NDIS invoices. Numerous plan management companies (who pay NDIS invoices) have provided feedback to you that your invoices should not include GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 38-7 | 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 38-38 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: In considering whether a supply is a taxable supply, regard must be given to section 9-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) which states: You make a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with Australia; and (d) you are registered, or required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. In your case, your supply of exercise physiology services satisfies paragraphs 9-5(a) to 9-5(d) of the GST Act, therefore your supply will be a taxable supply unless it is GST-free or input taxed under other provisions of the GST Act. The supply of exercise physiology services is not input taxed under any provisions of the GST Act or any other Act. Therefore, what is left to be considered is whether the supply of the exercise physiology services is GST-free. Subdivision 38-B of the GST Act provides that certain supplies relating to health are GST-free. In your case, the relevant provisions to examine are sections 38-7, 38-10 and 38-38 of the GST Act. | Detailed Reasoning - Medical services: Section 38-7 of the GST Act provides that a supply of a medical service is GST-free. The term medical service is defined in section 195-1 of the GST Act to mean: (a) a service for which Medicare benefit is payable under Part II of the Health Insurance Act 1973 ; or (b) any other service supplied by or on behalf of a medical practitioner or approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply. Accordingly, if a Medicare benefit is payable for an exercise physiology service you supply, the supply will be GST-free under section 38-7 of the GST Act. | Detailed Reasoning - Other health services: Subsection 38-10(1) of the GST Act provides that a supply of health services 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. All three requirements in subsection 38-10(1) of the GST Act must be satisfied for a supply of health services to be GST-free under that subsection. Exercise physiology is not a listed health service in the table in this subsection. Therefore, supplies of exercise physiology are not GST-free under subsection 38-10(1) of the GST Act. | Detailed Reasoning - Disability supports supplied to NDIS Participants: Under section 38-38 of the GST Act, the supply of certain disability supports to NDIS participants are GST-free. For the supply to be GST, all four of the following must be satisfied: (a) the NDIS participant has n NDIS plan in effect; (b) the supply is of reasonable and necessary supports that are specified in the statement of supports in the participant's NDIS plan; (c) there is a written agreement between you and the NDIS participant (or another person) that identifies the participant and states that the supply is of one or more of the reasonable and necessary supports specified in the statement in the participant's plan; and (d) it is a supply covered by one of the schedules in the GST-free Supply (National Disability Insurance Scheme Supports) Determination 2017 (NDIS Determination). The current NDIS Determination applies to supplies made on or after 1 July 2021. The NDIS Determination contains two tables: • Table 1 - supplies of supports (subsection 6(1) of the NDIS Determination) • Table 2 - supplies of supports covered by other determinations (subsection 6(2) of the NDIS Determination) If the supply is covered by Table 1, the requirement to be covered by the NDIS Determination is satisfied. Provided the other three requirements under paragraphs 38(a) to (c) of the GST Act are met, the supply of the support is GST-free. If Table 1 doesn't apply, the supply may be covered by Table 2. When an item in Table 2 is relevant to the 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 - Table 1: The supplies covered by Table 1of the NDIS Determination are: In relation to exercise physiology, the only item listed in Table 1 which may be applicable is item 8, 'Early intervention supports for early childhood'. The Explanatory Statement to the NDIS Determination provides examples of the types of supplies covered by each item in the NDIS Determination. The examples given for item 8 in Table 1 in the NDIS Determination include 'specialised individual therapy for early childhood'. The NDIS publication, NDIS Pricing Arrangements and Price Limits 2023/24 (version 1.1, released 16 June 2023), which is available at ndis.gov.au includes a section headed 'Early childhood supports (EC) - younger than 7' in the category of 'Capability Building - Improved Daily Living' (refer pages 90-91). It states that these early childhood support items can only be delivered by certain types of professionals. The list of early childhood professionals includes exercise physiologists. This means that supplies of exercise physiology provided to early childhood aged NDIS participants (i.e. those under seven years of age) are covered by item 8 in Table 1. Therefore, where the other three requirements of section 38-38 of the GST Act (listed above) are met, the supply of the exercise physiology to early childhood aged NDIS participants is GST-free. Supplies of exercise physiology provided to NDIS participants other than early childhood aged participants are not covered by Table 1 of the NDIS Determination. However, Table 2 of the NDIS Determination can be considered to determine if the supply is of a kind covered by the NDIS Determination. | Detailed Reasoning - Table 2: If Table 1 does not apply, a supply is only covered by the NDIS Determination if it is both : • covered by Table 2, and • covered by 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 (Government Funded) Determination), or - Sections 6 or 7 of the GST-free Supply (Health Services) Determination 2017 (Health Services Determination). Table 2 lists the following supports: 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. The items in Table 2 that exercise physiology may qualify under are items 2 and 4 provided it is also covered in one of the three other determinations specified above. The following is a summary of items from the three other determinations that are relevant to items 2 and 4 of Table 2: | Detailed Reasoning - Examples of supplies covered by Table 2 and one of the three other determinations: 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 facility Recreational therapy in a residential care facility 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 facility Support for people with a cognitive impairment in a residential care facility Emotional support in a residential care facility Rehabilitation support in a residential care facility Therapy services in a residential care facility (excluding long-term rehabilitation services) Exercise physiology does not fall within the items covered by the Care Determination summarised in the right hand column above for either item 2 or 4 of Table 2. However, exercise physiology is covered by items in the Residential Care (Government Funded) Determination, summarised in the right hand column above, provided that the exercise physiology is provided to NDIS participants in a residential facility. The requirement for the exercise physiology services to be supplied to participants in a residential facility arises from the requirements of the Residential Care (Government Funded) Determination itself which specifies that, to be covered, the services must be supplied to residents in a residential facility (See subsections 6(1), (2) and (3) of the Residential Care (Government Funded) Determination). A residential facility does not include a person's own private home. Therefore, exercise physiology services supplied to NDIS participants in a residential facility are GST-free provided the other three requirements in paragraphs 38-38 (a) to (c) of the GST Act are also met. However, the exercise physiology services that you supply to NDIS participants in their own private homes are not covered under Item 4 of Table 2 in the NDIS Determination. Your supplies of exercise physiology services to NDIS participants in their own homes will only be GST-free where: • a Medicare benefit is payable for the service; or • the supply is to early childhood aged NDIS participant.

The supply is to early childhood aged NDIS participants; or | The NDIS participant resides in a residential care facility; | the NDIS participant has an NDIS plan in effect; | the supply of exercise physiology is a reasonable and necessary support specified in the statement of supports in the participant's NDIS plan; and | Specialist Disability Accommodation (within the meaning of the National Disability Insurance Scheme rules) and accommodation/tenancy assistance | Assistance in coordinating or managing life stages, transitions and supports, including daily tasks in a group or shared living arrangement | Assistance with and training in travel/transport arrangements, excluding taxi fares | Interpreting and translation | Assistance to access and maintain education and employment | Assistive equipment for recreation | Management of funding for supports in a participant's plan