GST and psychology services

Is the entity, a supplier of health services, 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 psychology services in a group therapy session?

Yes, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies psychology services in a group therapy session.

The entity is a supplier of health services. The entity supplies psychology treatment in a group environment rather than individually.

The entity is registered as a psychologist as required by State law.

The therapy services provided in the group session are considered by the psychology profession as being necessary for the appropriate treatment of the patients in these circumstances.

The entity assesses each patient and determines that group therapy is an appropriate form of treatment for each of those patients. The group session is for treatment purposes and is not a general information session.

The entity is registered for goods and services tax (GST).

Subsection 38-10(1) of the GST Act provides that a supply of other health services is GST-free if: (a) it is a service of a kind specified in the table in subsection 38-10(1) of the GST Act; 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 that profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the recipient of the supply.

For the purposes of paragraph 38-10 (1)(a) of the GST Act, the service must be of a kind specified in the table in the subsection. Psychology services are listed at item 16 of the table contained in subsection 38-10(1) of the GST Act.

For the purposes of paragraph 38-10(1)(b) of the GST Act, a recognised professional must provide the service.

Section 195-1 of the GST Act provides that a person is a recognised professional, in relation to a supply of services of a kind specified in subsection 38-10(1) of the GST Act (psychology services), if:

'(a) 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'.

A person practicing in psychology is a 'recognised professional' if they are registered under a State or Territory law prohibiting the supply of psychology services without such registration. In this case, the entity is registered as a psychologist by a State law. As such, the psychologist is a recognised professional under paragraph 38-10(1)(b) of the GST Act.

For the purposes of paragraph 38-10(1)(c) of the GST Act, the psychologist must provide the service, and the psychology profession would need to consider the service as being necessary for the appropriate treatment of the recipient of the supply in these circumstances.

In this case, the group therapy services are conducted by a registered psychologist and are generally accepted in the psychology profession as being necessary for the appropriate treatment of the recipient of the supply. Therefore, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies psychology services in a group therapy session. [Note: In comparison, attendance at a seminar providing general information is not considered to be treatment and therefore is not GST-free under subsection 38-10(1) of the GST Act.]