1.a.11. Are massage services GST-free where a medical practitioner has referred the client?

For source of ATO view, refer to:

• issue 1.a of this issues register
• part 3 of GSTR 2006/9 – Goods and services tax; supplies.

This question raises the application of the second limb of the definition of a ‘*medical service’ in section 38-7. The phrase ‘on behalf of’ in the second limb of the definition of '*medical service' means the performance of a component of the service provided by a practitioner that is not necessarily supervised by that practitioner. An example is where a laboratory technician assists in undertaking pathology testing of specimens.

However, ‘on behalf of’ does not include a service performed on referral by another person. A service performed on referral by another person, is not a component of the supply being provided by the first practitioner. The service being provided by the second person will be a separate supply, the GST-free status of which must be examined by reference to the supply by that second person.

A referral, in itself, will not render the subsequent supply GST-free. A massage service will be a GST-free *medical service if either: a Medicare benefit is payable; or it is undertaken by a *medical practitioner (as defined in the GST Act) and the practitioner is skilled in the provision of this supply and such treatment is generally accepted by the profession as being appropriate treatment.

Additionally, under ‘Issue 2’ of this Log, a supply of a massage service is not a listed service for section 38-10 and will not be GST-free under that section unless it is:

11. supplied by a ‘*recognised professional’ as defined in section 195-1
12. is in relation to one of the table listed services such as ‘Physiotherapy’
13. is ‘generally accepted in that profession as being necessary for the appropriate treatment of the *recipient of the supply’.