GST and postnatal exercise classes

Is the entity, a physiotherapist, 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 a postnatal exercise class?

Yes, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies a postnatal exercise class, provided that the class is generally accepted in the physiotherapy profession as being necessary for the appropriate treatment of the recipient of the supply.

The entity is a physiotherapist that is registered under the relevant State or Territory Act that regulates physiotherapy services. The entity is supplying a postnatal exercise class to a patient.

The entity conducts an initial interview to determine whether the classes are appropriate for the particular patient.

The class is designed to help patients with physical problems encountered after childbirth (such as back problems or pelvic instability).

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

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

'Physiotherapy' is listed at item 17 in the table (Item 17). The entity is a registered physiotherapist that is providing physiotherapy services to a patient, in the form of a postnatal exercise class. Therefore, the first requirement in subsection 38-10(1) of the GST Act is satisfied.

The second requirement is that the person providing the service must be a recognised professional in relation to the supply of physiotherapy services. Section 195-1 of the GST Act provides that a person is a recognised professional in relation to a supply of a service of a kind specified in the table if: '(a) 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 entity is a physiotherapist that is registered under the relevant State or Territory Act that regulates physiotherapy services. Therefore, the entity is a 'recognised professional' as per the definition in section 195-1 of the GST Act. As such, the second requirement in subsection 38-10(1) of the GST Act is satisfied.

The third requirement is that the supply be generally accepted in the physiotherapy profession as being necessary for the appropriate treatment of the recipient of the supply.

'Appropriate treatment' is established where an entity assesses the recipient's state of health and determines a process to pursue, in an attempt to preserve, restore, or improve the physical or psychological wellbeing of that recipient to the extent that their training allows. Appropriate treatment includes the principles of preventative medicine.

Classes for postnatal women are considered to be 'appropriate treatment' where they are designed to specifically address the problems which exist for women after they have experienced labour. If the aim of the class is to return women to their physical state prior to labour, the class is not considered to be 'appropriate treatment'.

The entity's classes target the special needs of postnatal women because they are designed to help with the physical problems encountered after childbirth (such as back problems or pelvic instability). They are not merely exercise classes aimed at getting patients back in shape. As such, the classes are considered to be 'appropriate treatment'. Therefore, provided that this appropriate treatment is generally accepted in the physiotherapy profession as being necessary for the recipient of the supply, the third requirement in subsection 38-10(1) of the GST Act is satisfied.

The first 2 requirements in subsection 38-10(1) of the GST Act are satisfied, and the postnatal exercise class is considered to be 'appropriate treatment' as per the third requirement. Where, the supply is generally accepted in the physiotherapy profession as being necessary for the appropriate treatment of the recipient of the supply, the third requirement in subsection 38-10(1) of the GST Act is also satisfied.

As such, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies a postnatal exercise class, provided that the class is generally accepted in the physiotherapy profession as being necessary for the appropriate treatment of the recipient of the supply.