GST and Acupuncture, Naturopathy and Herbal Medicine Services

Are complementary health services GST-free?

Complementary health services are GST-free if they are:

listed in the GST act
provided by a ‘recognised professional’, and
generally accepted in the relevant listed complementary health service profession as necessary for the appropriate treatment of the recipient of the supply.

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What Natural Therapies are listed in the GST Act?

There are 21 health services listed in the GST act, listed below are the natural therapies:

Acupuncture
Chiropractic
Herbal medicine (including traditional Chinese herbal medicine and Ayurvedic Medicine)
Naturopathy
Osteopathy

To qualify, the service must be one of the actual therapies listed above and not just similar to one of those services.

Who is a ‘recognised professional’?

You are a ‘recognised professional’ in relation to a listed complementary health service if you are:

subject to a state or territory law requiring permission, approval or registration to supply that listed complementary health service in that state or territory, or
where no such state or territory law exists, a member of a professional association that has uniform national registration requirements relating to the provision of that listed complementary health service.

Is massage therapy GST-free?

A supply of massage therapy in itself is not GST-free because it is not listed in the GST act.

However, a supply of massage therapy is GST-free where the massage therapy is:

supplied as part of a GST-free supply of a listed complementary health service
supplied by a recognised professional in that listed complementary health service and is trained in massage therapy
considered by the listed complementary health service profession to be a standard technique or component of that listed complementary health service, and
accepted by the listed complementary health service profession as being necessary for the appropriate treatment of the recipient.

Massage therapy may also form part of some other GST-free services (for example, physiotherapy).

Are goods supplied as part of a listed complementary health service GST-free?

Chinese herbal medicine supplied as part of a GST-free acupuncture service

A Chinese herbal medicine preparation supplied by an acupuncturist in the course of an acupuncture service is GST-free if it is:

supplied at the same premises where the acupuncture service is supplied, and
individually customised for the treatment of that particular patient.

A Chinese herbal medicine preparation supplied by a Chinese herbal medicine practitioner during a consultation is GST-free only if it is completely used or consumed during the consultation.

If the medicine is only partially used or consumed during the consultation, only that used or consumed portion that is essential for treating that patient during that particular consultation will be considered GST-free.

Chinese herbal medicine supplied by a recognised professional in both acupuncture and traditional Chinese herbal medicine

A person may be a recognised professional in more than one of the services listed in the GST act, and may be supplying services that are a combination of more than one of those services.

Where a recognised professional in both acupuncture and traditional Chinese herbal medicine supplies a patient with an individually customised herbal preparation in the course of making a GST-free supply of a combination of these services, the preparation is GST-free if it is supplied at the premises where the treatment is supplied.

It does not matter where the customised Chinese herbal medicine preparation is consumed.

Goods supplied as part of a GST-free herbal medicine service or a GST-free naturopathy service

Goods supplied by a herbal medicine practitioner or a naturopath during a consultation is GST-free only if it is completely used or consumed during the consultation.

If the goods are only partially used or consumed during the consultation, only that used or consumed portion that is essential for treating that patient during that particular consultation will be considered GST-free.

Is the supply of Chinese herbs considered to be a GST-free supply of food?

Chinese herbs supplied as medicinal herbs are not a supply of GST-free food.

Is the importation (or supply) of Chinese dried herbs that can be used for both culinary and medicinal purposes non-taxable (or GST-free)?

An importation of Chinese herbs is non-taxable only if it would have been GST-free if supplied in Australia. Since most supplies of Chinese medicinal dried herbs in Australia are taxable supplies, most importations are taxable importations.

However, a small number of Chinese dried herbs have culinary (food) uses as well as medicinal uses. Herbs with food uses are those that are generally accepted as food or as an ingredient for food or beverages.

Common examples of herbs with food uses are lotus seeds, red dates, longan fruit, tangerine peel, sweet almond seeds and jasmine tea leaves. A supply of such herbs as an ingredient for food or beverages is a GST-free supply of food and therefore a non-taxable importation.

However, it should be noted that:

dried herbal ingredients for medicinal decoctions are not considered to be ingredients for food or beverages and are not GST-free*
medicinal dried herbs that are consumed by being added to soup or other food are not considered to be ingredients for that soup or other food and are not GST-free*
herbs provided as part of a herbal formula/prescription are not GST-free*
herbal goods in tablet or capsule form are not ‘food’ and are not GST-free*
where the overseas exporter specifically indicates (that is, labels and markets) dried herbs as being medicinal herbs, the importation will always be taxable
where the supplier is in Australia and specifically indicates (that is, labels and markets) dried herbs as being medicinal herbs, the supply will not be GST-free
where the overseas exporter supplies herbs that are accepted as food or ingredients for food or beverages as well as for medicinal purposes, and specifically indicates that the herbs are food, the importation is non-taxable, and
where the supplier is in Australia and supplies herbs that are accepted as food or ingredients for food or beverages as well as for medicinal purposes, and specifically indicates that the herbs are food, the supply is GST-free.

* The importation of such herbs is a taxable importation as their supply within Australia is not GST-free.

More information

For more information about GST refer to GST for small business.

If you need more information about when acupuncture, naturopathy and herbal medicine services are GST-free, you can:

visit the ATO website at www.ato.gov.au

Download – GST for Small Business Booklet

GST for small businesses
(Adobe PDF File)