Private ruling: Whether a health related service is GST free
Date of advice: 8 March 2019
Published: June 2019
Ruling period: From 1 October 2017 until 30 September 2021
Date scheme commenced: 1 October 2017

Ruling: Q1: Are your supplies GST free under section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. You are making taxable supplies of services not provided for under section 38-10 of the GST Act.

Relevant facts and circumstances: ● You are an organisation that uses Play Therapy to treat children. ● You are registered for GST and report on a quarterly basis. ● You chose to register despite being under the turnover threshold. ● Play Therapy is a specialised form of Child Psychology, providing psychotherapy to children. ● Play Therapy is a relatively new field in Australia but is not likely to be a listed profession yet. ● Most Play Therapists have a psychology or social work background. ● Play Therapy is a post graduate degree course. ● Traditional psychology is for the most part a verbal exchange between patient and professional, so it has limitations with young children who cannot express their emotions verbally when asked. ● Your Play Therapist is a registered member of the Australasia Pacific Play Therapy Association (APPTA) and has a Bachelor of Arts, a Diploma of Education, a Graduate Diploma in Play Therapy and currently undertaking her Masters in Play Therapy, with only their thesis remaining the last requirement to fulfil. ● The therapist is an international member of a global body based overseas. As Play Therapy is much more recognised and well established as a profession overseas it seemed necessary to be associated with this organisation. Due to their teaching background they are also a member of the teaching national body. You provided documentary evidence of membership for these professional bodies. ● You may employ another therapist. The selection criteria will be tertiary qualifications in either social work or Psychology, plus a graduate certificate in Play Therapy as a minimum requirement. ● Members of APPTA have a similar registration level of requirement as a Psychologist. It requires its members to undertake: – 200hrs face to face accredited learning; and – 200hrs of practical Play Therapy; and – 50hrs of supervision by a registered Play Therapy supervisor (RPT-S); and – 50hrs of personal therapy. ● Your Play Therapist is registered with APPTA, and once their Masters in Play Therapy is complete they can also apply for membership of the Australian Councillors Association (ACA). ● Your clients are usually referred by other health professionals who are Psychologists, Social Workers, Occupational Therapists, and Speech Therapists.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-10. | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: A supply of a health service is GST-free if all of the following are satisfied: – The service is a listed health service in the table – It is performed by a recognised health professional or, under certain circumstances, their assistant – The service is accepted in the relevant health profession as necessary and appropriate to treat the patient or recipient of the service. | Detailed Reasoning - Service: 1 Aboriginal or Torres Strait Islander health 2 Acupuncture 3 Audiology, audiometry 4 Chiropody 5 Chiropractic 6 Dental 7 Dietary 8 Herbal medicine (including traditional Chinese herbal medicine) 9 Naturopathy 10 Nursing 11 Occupational therapy 12 Optometry 13 Osteopathy 14 Paramedical 15 Pharmacy 16 Psychology 17 Physiotherapy 18 Podiatry 19 Speech pathology 20 Speech therapy 21 Social work | Detailed Reasoning - Counselling services and Play Therapy: To qualify as a service of a kind specified in the table in subsection 38-10(1) of the GST Act, the service must be the provision of one of those actual services listed and not just similar to one of those services. The list is strictly interpreted as the actual service listed in the provision and not something similar to one of the services. This interpretation is supported by the fact 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. 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 advised that the services you provide are a form of psychotherapy. Psychotherapy and psychoanalysis are not services of a kind specified in subsection 38-10(1). However, psychotherapy and psychoanalysis may be considered to be techniques of one or more services listed in subsection 38-10(1). If the psychotherapy is supplied by a recognised professional in relation to one of the listed services in subsection 38-10(1), 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 third dot point given above, namely, 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. Psychology is item 16 listed in the table in subsection 38-10(1). Therefore, psychotherapy may be considered as a technique used in the provision of psychology, which is specified in subsection 38-10(1). 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: a person is a recognised professional, in relation to the supply of a service of a kind specified in the table in subsection 38-10(1), if: - the service is supplied in a State or Territory in which the person has a 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; or - the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, and the person is a member of a professional association that has uniform national registration requirements relating to the supply of services of that kind; or - in the case of services covered by item 3 in the table - the service is supplied by an accredited service provider within the meaning of section 4 of the Hearing Services Administration Act 1997. So a recognised professional is a person who provides a service of a kind specified in the table in subsection 38-10(1) if the service is supplied in a State or Territory in which the person has permission or approval, or is registered under a State or 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 are not registered for the provision of psychology services in any State or 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.