Are homeopaths liable for GST?

Several years ago the AHA lobbied government to be included in the group of GST-exempt CAM professions but without success (see BACKGROUND below).

Therefore, homeopathy is not GST exempt but what does this mean?

The main point is that if you are GST registered you have to charge GST on consultations and medicines, if you are not GST registered you are not allowed to do so.

Businesses with a turn-over of more than $75,000 per year have to be registered for GST. This ceiling is adjusted by the Australian Taxation Office (ATO) from time to time. Such businesses have to prepare a quarterly business activity statement (BAS) and can claim the GST on any of their business expenses against any of the GST charged through their sales.

The period that is being considered will always be the current month and the eleven months preceding it. If you have reached the threshold within that period you have to register for GST immediately.

If your annual turn-over is less than the ceiling set by the ATO, it is up to you whether you wish to register for GST or not and most people choose not to. In this case you must not charge GST to your clients on consultations or medicines. However, like any other customer you will pay GST on any products and services you obtain for your business without being able to reclaim that GST.

Background

The reason for non-exemption from GST is that, under current legislation, homeopaths are not deemed to be ‘recognised professionals’.

In the early 2000s, the AHA examined the legislation in detail and made ongoing representations to both Federal and State Health Ministers to no avail.

The Federal Government addressed this matter in its review of complementary therapies in its ‘Expert Committee Report’, which was published in 2004, following the PAN Pharmaceutical incident. In principle, the recommendations were favourable to homeopathy and the AHA made a formal response confirming its position. This was later supported by the Federal Government’s response to the recommendations of its ‘Expert Committee’, which involved follow-up action by State Health Ministers. The AHA then made representations to all States but was told that these issues weren’t a matter of priority.

The more recent opposition to homeopathy by governments over the past 15 years has reduced the likelihood of that status quo changing.