3.c.2. Is the provision of local telephone calls, which are bundled into the bed fee, GST-free?

  • Issue 3.c.2. below is an historical issue which was a public ruling prior to 1 July 2010. GSTD 2012/4External Link (the Determination) contains the current ATO view which applies from 26 March 2009. The current ATO view supersedes the view previously contained in issue 3.c.2. below which is now in history. For periods between 26 March 2009 and 1 July 2010 where an entity relied on the views expressed in issue 3.c.2. below and to the extent that those views conflict with the views expressed in the Determination, the entity is protected so that any underpaid net amount ceases to be payable or any amount overpaid by the Commissioner is taken to have been payable.

This question raises consideration of subsection 38-20(1). The question focuses upon the provision of local telephone calls which would be a separate supply compared to the provision of the actual telephone to make the calls. The provision of the telephone itself would be part of the provision of accommodation and would be GST-free. The telephone calls themselves are not goods and therefore are not considered to be a supply of goods that is directly related to the supply of hospital treatment.

Further, the calls do not form part of the accommodation or any other service intended to manage a disease, injury or condition.

Where a number of goods or services are provided for a single fee then section 9-80 requires an apportionment of the value of that part of the actual supply that is a taxable supply and that part of the actual supply which is either GST-free or input taxed. If the fee for the local telephone calls is bundled into the bed fee then an apportionment will be required.

    Last modified: 16 Oct 2013QC 16330