GST and hypnotherapy

Is the entity, a hypnotherapist, making a GST-free supply under Subdivision 38-B of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies hypnotherapy services to a patient?

No, the entity is not making a GST-free supply under Subdivision 38-B of the GST Act, when it supplies hypnotherapy services to a patient. The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a hypnotherapist. The entity supplies clinical and analytical hypnotherapy services to a patient.

There is no medicare benefit payable under Part II of the Health Insurance Act 1973 for these particular hypnotherapy services.

The entity is not a medical practitioner or an approved pathology practitioner for the purposes of the Health Insurance Act 197 3. Nor does the entity supply its services on behalf of a medical practitioner or an approved pathology practitioner.

The entity is not a practitioner of any of the other health services listed in the table in subsection 38-10(1) of the GST Act.

The entity is registered for goods and services tax (GST). The supply satisfies all of the other positive limbs of section 9-5 of the GST Act.

Under Subdivision 38-B of the GST Act, certain health services are GST-free. Of relevance in determining the GST status of the entity's supply of hypnotherapy, is section 38-7 of the GST Act which deals with the supply of medical services; and section 38-10 of the GST Act which deals with the supply of other health services.

Under subsection 38-7(1) of the GST Act, a supply of a 'medical service' is GST-free. A 'medical service' is defined under section 195-1 of the GST Act to mean: • a service for which a medicare benefit is payable under Part II of the Health Insurance Act 1973 ; or • 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.

In this case, there is no medicare benefit payable under Part II of the Health Insurance Act 1973 . As such, for the supply of hypnotherapy services to be GST-free, it must satisfy the second limb of the definition of 'medical service'. Part of that definition requires that the service be supplied by or on behalf of a medical practitioner or approved pathology practitioner.

The terms 'medical practitioner' and 'approved pathology practitioner' are separately defined under section 195-1 of the GST Act to mean a person who is, for the purposes of the Health Insurance Act 1973 , a medical practitioner or an approved pathology practitioner.

The entity is neither a medical practitioner nor an approved pathology practitioner; nor does it supply its services on behalf of a medical practitioner or an approved pathology practitioner. Therefore the hypnotherapy services supplied by the entity are not GST-free medical services under subsection 38-7(1) of the GST Act.

Under subsection 38-10(1) of the GST Act, an entity makes a GST-free supply of other health services if: • it provides a service of a kind specified in the table in subsection 38-10(1) of the GST Act or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) (paragraph 38-10(1)(a) of the GST Act); and • the entity is a recognised professional in relation to the supply of services of that kind (paragraph 38-10(1)(b) of the GST Act); and • 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 (paragraph 38-10(1)(c) of the GST Act).

Hypnotherapy is not listed in the table in subsection 38-10(1) of the GST Act or in the GST Regulations. Therefore, a supply of hypnotherapy services, in itself, does not satisfy the requirement in paragraph 38-10(1)(a) of the GST Act.

However, the requirement in paragraph 38-10(1)(a) of the GST Act is satisfied where the supplier is supplying one of the services listed in the table in subsection 38-10(1) of the GST Act, and hypnotherapy is considered to be a standard technique or component of that listed service. For example, a psychology service is a service in the table in subsection 38-10(1) of the GST Act for which hypnotherapy may be considered a standard technique or component.

The entity in this case is not supplying any of the services listed in the table in subsection 38-10(1) of the GST Act. Therefore, the requirement in paragraph 38-10(1)(a) of the GST Act is not satisfied and the supply is not GST-free under subsection 38-10(1) of the GST Act.

As such, the entity is not making a GST-free supply of a medical service or an other health service under Subdivision 38-B of the GST Act when it supplies clinical and analytical hypnotherapy to a patient.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is not GST-free under any of the other provisions in Division 38 of the GST Act nor is it input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies hypnotherapy services to a patient.