ATO Interpretative Decision

ATO ID 2001/495

Goods and Services Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a medical practitioner, making a GST-free supply under subsection 38-7(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a service of preparing a travel subsidy form for a patient?

Decision

No, the entity is not making a GST-free supply under subsection 38-7(1) of the GST Act when it supplies a service of preparing a travel subsidy form for a patient. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a medical practitioner. The entity supplies a service of completing a travel subsidy form for a patient. The form is completed when a patient is required to travel to receive treatment. The patient receives a partial reimbursement of their travel costs when a Government department processes the form.

The entity charges a fee for the completion of the form. There is no medicare benefit payable for the service.

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons for Decision

Under subsection 38-7(1) of the GST Act, the supply of a medical service is GST-free.

The term 'medical service' is defined under section 195-1 of the GST Act to mean:

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a service for which a medicare benefit is payable under Part II of the Health Insurance Act 1973; or

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any other service supplied by or on behalf of a medical practitioner or approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

In this case, there is no medicare benefit payable for the service provided by the entity. As such, the service does not fall within the first limb of the definition of medical service in section 195-1 of the GST Act. Therefore, it is necessary to determine whether the entity is making a supply that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply, as per the second limb of the definition of a medical service in section 195-1 of the GST Act.

It is considered that appropriate treatment is established where a medical practitioner assesses the recipient's state of health and determines a process to pursue in an attempt to preserve, restore or improve the physical or psychological wellbeing of the recipient. Appropriate treatment includes the principles of preventative medicine.

In this case, the completion of the travel subsidy form is not a service which preserves, restores or improves the physical or psychological wellbeing of the recipient. The form is prepared to enable the patient to claim a partial reimbursement of their travel costs. The preparation of the form it is not for the 'appropriate treatment' of the patient. Therefore, the supply is not generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply. As such, the supply is not GST-free under subsection 38-7(1) of the GST Act.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-ree under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it completes a travel subsidy form for a patient.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   subsection 38-7(1)
   Division 40
   section 195-1

Keywords
Goods & services tax
GST free
GST health
Medical services
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  22 October 2001

ISSN: 1445-2782