1.a.24. A Medical Practitioner provides a service involving the testing of employees of a meatworks for Q-Fever and if necessary, vaccination of the employees. The employer company requires all employees to have the tests and if appropriate, the vaccination. A Medical Practitioner bills the company on a per patient/service basis. What is the GST status of the service? Would the GST status of the service be different if the service was provided at the sole option of the employee?

For source of ATO view, refer to Part 3 of GSTR 2006/9External LinkGoods and services tax: supplies.

A medical practitioner will be making a supply to the employer (and the employer will be the recipient of that supply) where:

  • the employer engages the medical practitioner to provide something to them or to someone else (for example their employee)
  • the employer, by agreement with the medical practitioner, determines what is required to be provided to them or to the employee and
  • either  
    • the agreement creates a binding obligation between the employer and the medical practitioner for the thing to be provided to them or to the employee or
    • in the absence of a binding obligation, the factors listed in paragraph 221B of GSTR 2006/9 in combination indicate that the medical practitioner is making a supply to the employer (payer), being the service of testing and vaccinating the employee.

This will be the case regardless of whether the employer requires the employee to be tested and/or vaccinated or whether it is at the option of the employee. The supply of the testing services as well as any subsequent reports will be a taxable supply where no Medicare benefit is payable. Where the medical practitioner is registered or required to be registered for GST, the supply will be a taxable supply. However, the employer will generally be entitled to an input tax credit.

However, where an individual, concerned with the health risks associated with their work environment, requests a medical examination by a medical practitioner, the supply will be GST-free if a Medicare benefit is payable. If no Medicare benefit is payable, it is accepted that the supply may be 'appropriate treatment' and will be GST-free where the requirements of section 38-7 are satisfied and the employee, rather than the employer, is the recipient of the supply (for a discussion of these requirements, refer to Part 1.a. and 1.b. of the Health Issues Log).

    Last modified: 16 Oct 2013QC 16330