What do these changes mean for supplies made to insurers, scheme operators and Australian government agencies?
Certain health-related supplies are GST-free, including most medical services, hospital treatments and other health services. Commonly, a health-related supply is GST-free when it is for the treatment of the recipient (that is, an individual).
In some instances, these supplies are made under multi-party arrangements, where GST-free health-related goods or services are supplied to an individual (the underlying supply) which results in the supplier making a further supply to a third party. Where the third party is an insurer, an operator of a statutory compensation scheme, a compulsory third party scheme operator, or an Australian government agency, this supply is also GST-free.
Prior to the enactment of the Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012 such health-related supplies to these third parties may have been subject to GST as the supply was not for the treatment of the recipient (that is, the insurer, scheme operator, or Australian government agency).
The legislative amendment means that the supply made to the insurer, scheme operator, or Australian government agency in these circumstances is GST-free, to the extent that the underlying supply provided to the individual is GST-free.