Issue
Is the entity, a homeopath, 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 herbal formulas and homoeopathic remedies during a homeopathic service?
Decision
No, the entity is not making a GST-free supply under Subdivision 38-B of the GST Act when it supplies herbal formulas and homoeopathic remedies during a homeopathic service. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a homeopath. The entity supplies herbal formulas and homeopathic remedies during a homeopathic service.
The homeopathic service is not a GST-free supply of a health service under subsection 38-10(1) of the GST Act.
The supplies are not covered by subsections 38-7(3) and 38-20(3) or sections 38-47 and 38-50 of the GST Act.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
A supply of goods such as herbal formulas and homeopathic remedies in the course of supplying a health service, is GST-free if the supply satisfies either subsection 38-10(3) or 38-10(4) of the GST Act.
For the supply of goods to be GST-free under subsection 38-10(3) or 38-10(4) of the GST Act, one of the requirements is that the goods must be supplied to an individual in the course of supplying to that individual a GST-free health service. A health service is GST-free if it satisfies the requirements of subsection 38-10(1) of the GST Act.
The entity is not supplying a health service that is GST-free under subsection 38-10(1) of the GST Act. Therefore, the supply of herbal formulas and homeopathic remedies does not satisfy either subsection 38-10(3) or subsection 38-10(4) of the GST Act.
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 neither GST-free under any other provisions in Division 38 of the GST Act nor 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 herbal formulas and homeopathic remedies during the course of a homeopathic service.