• 1.j. Where a person hires or purchases goods through a hospital which are not listed in Schedule 3 or specified in the regulations, will the goods be GST-free?

    This issue is a public ruling for the purposes of section 105-60 of Schedule 1 to the Taxation Administration Act 1953.

    The hire or purchase of goods not listed in Schedule 3 or specified in the regulations will not be GST-free under section 38-45. However, in some circumstances, the hire or purchase of these goods maybe GST-free under subsection 38-20(3).

    Subsection 38-20(3) provides that a supply of goods will be GST-free if it is directly related to a supply of GST-free hospital treatment and it is supplied by, or on behalf of, the supplier of the GST-free hospital treatment. Hospital treatment as defined for the purposes of subsection 38-20(3) relates to the provision of accommodation and nursing care for patients of the hospital.

    Accordingly, a supply of goods (not listed in Schedule 3 or specified in the regulations) by or on behalf of a hospital to a patient of the hospital, will be GST-free where the goods supplied are directly related to a supply of GST-free accommodation or nursing care.

    For example, the hire of a breast pump by a hospital to a patient for use while they are a patient of the hospital will be GST-free under subsection 38-30(3). It is important to emphasise that a patient being treated at home under the 'Early Discharge Program' is still considered to be a patient of the hospital.

    However, the hire of a breast pump by a hospital to an out patient (that is, a patient who has been discharged), will not be GST-free under subsection 38-30(3), as the supply of that good is not directly related to a supply of GST-free hospital treatment, as that term 'hospital treatment' is defined.

    Further, the provision of drugs and medicines provided by a hospital to a patient will be GST-free where the goods supplied are directly related to the nursing care of a patient (receiving GST-free 'hospital treatment') If the 'hospital treatment' is GST-free and the hospital contracts out to a Pharmacist the service of supplying drugs and medicines to it's patients, the drugs and medicines are being provided on behalf of the hospital and will be GST-free to the patient. However, the supply from the Pharmacist to the hospital will not be GST-free.

      Last modified: 02 Apr 2014QC 16333