GST and acupuncture services supplied before 1 July 2003

Is the entity, a qualified acupuncturist, 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 acupuncture services before 1 July 2003?

Yes, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies acupuncture services before 1 July 2003, where the services are generally accepted in the acupuncture profession as being necessary for the appropriate treatment of the recipient of the supply.

The entity is a qualified acupuncturist. The entity supplies acupuncture services to a patient before 1 July 2003.

The entity did not commence practicing acupuncture until after 8 July 1999. The entity has completed an advanced diploma course in acupuncture before the acupuncture service is performed.

The advanced diploma course in acupuncture satisfies the meaning of an 'accredited course of study' as provided by subregulation 7(6) of the A New Tax System (Goods and Services Tax Transition) Regulations 2000 (Transition Regulations).

Victoria requires practitioners of acupuncture services to be registered under the Chinese Medicine Registration Act 2000 (Vic) . With the exception of Victoria, there is no other State or Territory law that requires the entity to have permission or approval, or to be registered to supply its acupuncture services.

The entity does not supply acupuncture services in Victoria. 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 or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 2019 (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).

'Acupuncture' is listed at item 2 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 satisfied.

For the purposes of paragraph 38-10(1)(b) of the GST Act, the entity supplying the service must be a recognised professional in relation to the supply of acupuncture services. However, pursuant to section 21 of the A New Tax System (Goods and Services Tax Transition) Act 1999 (Transition Act): (1) paragraph 38-10(1)(b) of the GST Act does not apply in relation to a supply of acupuncture if the service is performed before 1 July 2003; and (2) the supply of acupuncture performed before 1 July 2003 is not GST-free if the supplier does not meet the requirements (if any) set out in the Transition Regulations made for the purposes of subsection 21(2) of the Transition Act.

The entity is supplying its acupuncture services before 1 July 2003. Therefore, for the services to be a GST-free supply, the entity must meet the requirements set out in any regulation made for the purposes of subsection 21(2) of the Transition Act. Regulation 7 of the Transition Regulations sets out these requirements.

Subregulation 7(2) of the Transition Regulations requires that a supplier of acupuncture, herbal medicine or naturopathy must have permission or approval, or be registered to perform that service if the law of the State or Territory in which the service is performed requires that person to have such permission, approval or registration.

Victoria requires practitioners of acupuncture services to be registered under the Chinese Medicine Registration Act 2000 (Vic) . With the exception of Victoria, there is no other State or Territory law that requires the entity to have permission or approval, or to be registered to supply its acupuncture services. The entity does not supply acupuncture services in Victoria.

Subregulation 7(3) of the Transition Regulations provides that if subregulation 7(2) does not apply, the supplier must meet the requirements of subregulation (4) or (5).

Subregulation 7(5) of the Transition Regulations lists the requirements for entities that do not require State or Territory permission or approval to supply their services where the supplier commenced practising in the relevant discipline after 8 July 1999.

The entity must, before the service is performed: • have satisfied the requirements for the award of a diploma, advanced diploma or degree in the discipline by completing an accredited course of study within the meaning of subregulation 7(6) of the Transition Regulations; or • have an overseas qualification in the discipline that is assessed by the relevant assessing authority for the discipline as being the equivalent of a diploma, advanced diploma or degree in the discipline.

The entity has completed an advanced diploma course in acupuncture that is an 'accredited course of study' for the purposes of subregulation 7(6) of the Transition Regulations, before the acupuncture service is performed. Therefore, the entity meets the requirements of subregulation 7(5) of the Transition Regulations and the entity's supply of acupuncture services is not excluded from being GST-free by subsection 21(2) of the Transition Act.

For the purposes of paragraph 38-10(1)(c) of the GST Act, the supply of the service must be generally accepted, in the relevant profession, as being necessary for the appropriate treatment of the recipient of the supply.

For the supply to be 'generally accepted', the particular acupuncture service supplied and the circumstances in which it is provided, must be generally accepted in the profession associated with supplying acupuncture services. Therefore, it is this particular profession that ultimately determines which services are generally accepted.

'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.

Therefore, where the entity supplies a service of acupuncture, and assesses the recipient's state of health and determines a process to pursue to preserve, restore or improve the physical or psychological wellbeing of that recipient and the acupuncture profession generally accepts this treatment as appropriate, the requirements in paragraph 38-10(1)(c) of the GST Act are also met.

The entity satisfies the requirements in paragraph 38-10(1)(a) of the GST Act and subregulation 7(5) of the Transition Regulations. Therefore, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies acupuncture services before 1 July 2003, where the services are generally accepted in the acupuncture profession as being necessary for the appropriate treatment of the recipient of the supply. [Note 1: Where an entity supplies a service that is not generally accepted in the relevant profession as being necessary for the appropriate treatment of the recipient of the supply, the requirement in paragraph 38-10(1)(c) of the GST Act is not met and the supply is not GST-free. Note 2: Where a service of acupuncture is supplied after 30 June 2003, the transitional provisions will no longer apply. Paragraph 38-10(1)(b) of the GST Act will apply and the entity must be a 'recognised professional' as defined in section 195-1 of the GST Act. Note 3: Where an entity is supplying acupuncture services in Victoria, the entity must be registered under the Chinese Medicine Registration Act 2000 (Vic) to satisfy the requirements of subsection 21(2) of the Transition Act and subregulation 7(2) of the Transition Regulations.]

Date of Amendment Part Comment 9 April 2019 Throughout Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 . 2 July 2007 This ATO ID was amended on 2 July 2007 to make reference to Transition Regulation.

Date of Amendment | Part | Comment

9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 .

2 July 2007 | This ATO ID was amended on 2 July 2007 to make reference to Transition Regulation.