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Goods supplied as part of a GST-free health service

Last updated 17 August 2023

Work out the treatment for goods supplied as part of a GST-free health service.

When is a supply of goods GST-free?

A supply of goods is GST-free if it is both:

  • a necessary part of providing the GST-free health service
  • supplied at the same time and place as the service.

The goods must be either:

  • specific to treating the illness or disability of the particular patient
  • essential for treating that patient during that particular consultation.

However, there are different rules for:

  • optometrists and pharmacists
  • herbal medicine practitioners (including Chinese herbal medicine practitioners) and naturopaths.

Example: supply of goods to a patient

Dr Jones treats a patient's injury during a consultation by applying a bandage. If the consultation is GST-free, the bandage is also GST-free. However, extra bandages, dressings and antiseptics the patient takes home are not GST-free.

End of example

Optometrists and pharmacists

Goods supplied by an optometrist or pharmacist are only GST-free if they qualify for GST-free status under other provisions, such as medical aids or appliances or GST-free drugs and medicinal preparations.

Herbal medicine practitioners and naturopaths

Goods supplied during a GST-free consultation by a recognised professional herbal medicine practitioner, Chinese herbal medicine practitioner or a naturopath are GST-free if they are completely used or consumed during a consultation that is GST-free.

If the goods are only partially used or consumed during the consultation at the premises, only the used portion is GST-free.

Different rules apply if you are registered as a recognised professional in more than one service, that is in acupuncture, as well as herbal medicine (including Chinese herbal medicine) or naturopathy.

Chinese herbs

Some Chinese dried herbs that are generally used as food or as an ingredient for food can also be used for medicinal or therapeutic purposes. However, Chinese herbs supplied as medicines are not GST-free food.

Common examples of food herbs are lotus seeds, red dates, longan fruit, tangerine peel, sweet almond seeds and jasmine tea leaves. The supply of these foods or ingredients for food is GST-free, even though they have medicinal or therapeutic purposes. When they are imported as food or ingredients for food, they are a non-taxable import.

Chinese herbs are not GST-free where they are:

  • not considered to be ingredients for food or beverages
  • provided as part of a herbal formula or prescription
  • in tablet or capsule form
  • specifically labelled and marketed as medicinal herbs, either in Australia or by an overseas exporter.

Chinese herbs are GST-free when they are accepted as food or ingredients for food or beverages and are labelled and marketed as such.