• 1.a.9. Who is the recipient of a supply of diagnostic imaging (including x-rays) and pathology services?

    For source of ATO view, refer to the example in paragraph 118 and general principles in part 3 of GSTR 2006/9External LinkGoods and services tax: supplies.

    The provision of diagnostic imaging (including x-rays) and pathology examinations and consequent results will be GST-free where the elements of section 38-7 are satisfied. Where a Medicare benefit is payable, the supply will be GST-free. If a Medicare benefit is not payable the supply must be addressed under the second limb of the definition of ‘medical service’ in section 195-1 of the GST Act. The second limb of the definition of ‘*medical service’ requires the recipient to be identified. This question focuses on identifying the recipient of the supply in the question.

    In relation to private patients and diagnostic imaging or pathology services, it is understood that referral requests are generally made by a medical practitioner and the results are provided to that practitioner for interpretation, or to the patient for interpretation by that practitioner. The x-ray or pathology is a separate supply provided to the patient (as the recipient of the supply) and is not provided on behalf of the referring practitioner. The patient can choose whether or not to attend for the x-ray or pathology service and, especially in relation to pathology, the patient can request that the results be provided to other medical practitioners for that patient's treatment.

    However, where a supply of diagnostic imaging and pathology services is contracted out to another entity (for example contracted out by a hospital to a diagnostic imaging or pathology contractor), there will be two supplies. The first supply is from the contractor to the hospital and the second supply is from the hospital to the patient.

    The nature of the supply by the contractor to the hospital is not ‘appropriate treatment’ of the '*recipient of the supply' under section 38-7 because the recipient of the supply is the hospital. Accordingly, the supply will not be GST-free pursuant to section 38-7.

    However, in relation to the supply by the hospital to the patient, the patient is the recipient and, provided that the other elements of section 38-7 are satisfied, the supply will be GST-free.

      Last modified: 16 Oct 2013QC 16330