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  • Medical services

    Medical services are GST-free. A medical service is:  

    • a service for which a Medicare benefit is payable
    • any other service supplied by or on behalf of a medical practitioner or approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

    The recipient of the supply by the medical professional will not always be the patient. In some cases, it may be another business.

    Some health services are not GST-free, including cosmetic procedures where no Medicare benefit is payable – for example, removal of a tattoo.

    On this page:

    Services performed on behalf of a medical professional

    A service is performed on behalf of a medical professional if:

    • it is billed in the name of the medical professional and they accept full responsibility for the service
    • it is part of the service the medical professional provides
    • the medical professional is involved in at least part of that particular service.

    Example: GST-free service performed on behalf of a medical professional

    Dr Jones, a medical practitioner, employs Angela, a nurse. Angela bandages Dr Jones's patient as part of the treatment provided by Dr Jones. Because Angela performs the bandaging on behalf of Dr Jones, the bandaging is also GST-free.

    End of example

    Referrals

    When a medical practitioner refers a patient to another person, such as a specialist, that second person's service is not:

    • performed on behalf of the referring practitioner
    • part of the referring practitioner's supply.

    The service provided by the second person must be considered separately to work out if it is GST-free.

    Example: Referral to another person

    Dr Jones refers a patient to a physiotherapist. The GST status of Dr Jones's service and the physiotherapist's service must be considered separately.

    End of example

    Medical reports

    A medical report that a medical practitioner supplies is only GST-free where:

    • a Medicare benefit is payable for the report
    • the report is an ordinary and natural part of the performance of the GST-free medical service.

    This applies whether the medical practitioner provides the report to the patient, or directly or indirectly to the third party.

    Example 1: Report supplied to an insurer

    Dr Green provides GST-free medical services to Annabelle. The services provided to Annabelle are covered by worker’s compensation. As the service is covered by worker’s compensation, a Medicare benefit is not payable for the services.

    City Insure contacts Dr Green and asks her to provide a progress report on Annabelle’s treatment and an estimate of the number of further treatments that Annabelle requires. A Medicare benefit is also not payable for the report.

    The report by Dr Green to City Insure is not GST-free because:

    • a Medicare benefit is not payable for the report
    • City Insure is the recipient of the supply
    • the report is not a natural part of the performance of the GST-free medical service that Dr Green supplies to Annabelle.
    End of example

    Example 2: Report for injury compensation

    Southside Lawyers act for Jason who was injured in a car accident. Jason is seeking compensation from the other driver for the injuries suffered. Southside Lawyers ask Jason to visit his general practitioner, Dr Cliffe, to have an examination to assess the extent of his injuries for the purposes of litigation.

    Dr Cliffe examines Jason and provides a report which Jason gives to Southside lawyers. A Medicare benefit is not payable for the examination or the report.

    The report by Dr Cliffe is not GST-free because:

    • a Medicare benefit is not payable for the report
    • the report is not a natural part of any GST-free medical service that Dr Cliffe supplies to Jason.
    End of example

    Example 3: Report supplied to another medical practitioner

    Gordon is a resident of the United States of America and is not entitled to Medicare benefits.

    While Gordon is visiting Australia he goes to a local general practitioner, Dr Hannaford, as he is suffering from an illness. Dr Hannaford refers Gordon to Dr Jackson for a pathology test. Gordon engages Dr Jackson to supply the pathology services. The pathology test would be generally accepted in the medical profession as being necessary for Gordon’s appropriate treatment.

    Dr Jackson’s nurse takes blood for examination. Dr Jackson reviews the results and provides his written conclusions which are sent electronically to Dr Hannaford.

    Even though the report is sent electronically by Dr Jackson to Dr Hannaford, Gordon is the recipient of the supply as he engaged Dr Jackson to supply the pathology services.

    The pathology service and the written conclusions are GST-free because they are a natural part of the performance of the GST-free medical service. It does not matter that a Medicare benefit is not payable.

    End of example
      Last modified: 18 Nov 2019QC 16263