1.a.26 What is the GST status of supplies made by non-employee medical practitioners under the following arrangements with the Australian Defence Force (ADF):
For source of ATO view, refer to Part 3 of GSTR 2006/9External Link – Goods and services tax: supplies.
- Contract Health Practitioner (CHP): a medical practitioner is engaged to provide services and treatment to military personnel in a Defence establishment, normally where a uniformed medical practitioner is not available and a vacancy of up to 12 months exists within a Defence establishment.
- Sessional Contract Practitioner (SCP): a medical practitioner is engaged for a series of agreed sessions to provide services not available in ADF Health Facilities.
- Fee for Service (FFS): the ATO understands that no standard arrangement exists, medical practitioners being engaged at a local level for individual consultations at their usual fees.
It is considered that where no Medicare benefit is payable because the ADF pays for the services provided, under the CHP, SCP and FFS arrangements, a medical practitioner makes a supply to the ADF where:
- the ADF engages the medical practitioner to provide something to them or to someone else
- the ADF, by agreement with the medical practitioner, determines what is required to be provided to them or to someone else
- the agreement creates a binding obligation between the ADF and the medical practitioner for the thing to be provided to them or to someone else or, in the absence of a binding obligation, taking the factors listed in paragraph 221B of GSTR 2006/9 into account, the medical practitioner is considered to make a supply to the ADF that involves a supply by the medical practitioner to the military personnel.
Depending on the arrangement or framework, the medical practitioner may make a supply to both the military personnel and the ADF.
From 1 July 2012, as the ADF is an Australian government agency, the supply by the medical practitioner to the ADF may be GST-free under section 38-60(3).
Section 38-60(3), provides that if a supply (the underlying supply) by a health care provider to an individual (the patient) is either wholly or partly GST-free under Subdivision 38-B, then a supply of the service of making the underlying supply by the health care provider to an Australian government agency is GST-free to the same extent as the underlying supply.In relation to the FFS arrangement, where the requirements in paragraphs (a) to (c) above are not met, there is generally one supply by the medical practitioner to the patient for which the ADF provides consideration. This supply is GST-free where the medical profession would consider the service necessary for the appropriate treatment of the patient as recipient of the supply, and the other requirements of section 38-7 are met.