3.a.1. Where a public hospital contracts with an approved pathology provider for provision of pathology services to the public hospital, will the supply from the approved pathology provider to the public hospital be GST-free?

For source of ATO view, refer to:

• GSTD 2012/4 (formerly issue 3.a in this issues register)
• Part 3 of GSTR 2006/9 – Goods and services tax: supplies.

Generally, where a public hospital contracts with an independent third party to supply goods or services to it, the supply will be a taxable supply unless another GST-free provision applies (for example section 38-45 or section 38-60).

From 1 July 2012, where the public hospital is an Australian government agency, the supply to the public hospital will be GST-free to the extent that the underlying supply of the health service to the patient is a GST-free health supply under Subdivision 38-B (section 38-60). For administrative ease however, the parties may agree for the supply to the public hospital, or supplies of a kind that include that supply, not to be treated as GST-free (section 38-60(4)).