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GST and Acupuncture, Naturopathy and Herbal Medicine Services

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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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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 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.