3.c. Goods that directly relate to a supply of GST-free ‘*hospital treatment’

For source of ATO view, refer to:

• GSTD 2012/4 (formerly issue 3.a in this issues register)
• GSTR 2001/1 Goods and services tax: supplies that are GST-free for tertiary education courses.

Subsection 38-20(3) provides a supply of goods will be GST-free if it is directly related to the supply of the GST-free hospital treatment and it is supplied by, or on behalf of, the supplier of GST-free hospital treatment.

The supply of goods which are not ‘directly related’ to the supply of GST-free hospital treatment will not be GST-free under subsection 38-20(3). If this section does not apply then other GST-free provisions may need to be considered.

With the change of the definition of 'hospital treatment' from subsection 67(4) of the National Health Act 1953 to section 121-5 of the Private Health Insurance Act 2007, with effect from 26 March 2009, means that goods used to manage a disease, injury or condition will be covered under subsection 38-20(1) of the GST Act.