ATO Interpretative Decision

ATO ID 2002/996 (Withdrawn)

Goods and Services Tax

• This ATO ID is withdrawn as it is a straight application of the law and does not contain an interpretative decision.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a supplier of medical testing services, making a GST-free supply under Subdivision 38-B of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies testing services to detect a 'medical condition'?

Decision

No, the entity is not making a GST-free supply under Subdivision 38-B of the GST Act when it supplies testing services to detect a 'medical condition'.

The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a supplier of medical testing services. The entity supplies testing services to detect a 'medical condition'.

There is no medicare benefit payable under Part II of the Health Insurance Act 1973 for the supply of these particular testing services.

The entity is not a medical practitioner or an approved pathology practitioner for the purposes of the Health Insurance Act. The entity does not supply its services on behalf of a medical practitioner or an approved pathology practitioner.

The entity is not a practitioner of any of the health services specified in the table in subsection 38-10(1) of the GST Act, or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).

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 Subdivision 38-B of the GST Act, certain health services are GST-free. Of relevance in determining the GST status of the entity's supply of testing services is section 38-7 of the GST Act which deals with the supply of medical services and section 38-10 of the GST Act which deals with the supply of other health services.

Under subsection 38-7(1) of the GST Act, a supply of a 'medical service' is GST-free. A 'medical service' is defined under section 195-1 of the GST Act to mean:

•

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

•

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 under Part II of the Health Insurance Act for the supply of the testing services. This means that for the supply of the testing services to be GST-free, it must satisfy the second limb of the definition of 'medical service'. Part of that definition requires that the service be supplied by or on behalf of a medical practitioner or approved pathology practitioner.

The terms 'medical practitioner' and 'approved pathology practitioner' are separately defined under section 195-1 of the GST Act to mean a person who is a medical practitioner or an approved pathology practitioner for the purposes of the Health Insurance Act .

The entity is not a medical practitioner or an approved pathology practitioner. Furthermore, the entity does not supply its services on behalf of a medical practitioner or an approved pathology practitioner. Therefore, the entity is not making a GST-free supply under subsection 38-7(1) of the GST Act when it supplies testing services to detect a medical condition.

Under subsection 38-10(1) of the GST Act, a supply of a health service is GST-free where:

•

it is a service of a kind specified in the table in subsection 38-10(1) of the GST Act, or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) (paragraph 38-10(1)(a) of the GST Act); and

•

the supplier is a recognised professional in relation to the supply of services of that kind (paragraph 38-10(1)(b) of the GST Act); and

•

the supply would be generally accepted in the profession associated with supplying services of that kind as being necessary for the appropriate treatment of the recipient of the supply (paragraph 38-10(1)(c) of the GST Act).

Testing services to detect a 'medical condition' are not specified in the table in subsection 38-10(1) of the GST Act or in the GST Regulations. Further, the entity is not a practitioner in any of the services that are specified in subsection 38-10(1) of the GST Act or GST Regulations. Therefore, the entity is not making a GST-free supply under subsection 38-10(1) of the GST Act.

Accordingly, the entity is not making a GST-free supply of a medical service or any other health service under Subdivision 38-B of the GST Act when it supplies testing services to detect a 'medical condition'.

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-free under any other provisions in 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 supplies testing services to detect a 'medical condition.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   Subdivision 38-B
   section 38-7
   subsection 38-7(1)
   section 38-10
   subsection 38-10(1)
   paragraph 38-10(1)(a)
   paragraph 38-10(1)(b)
   paragraph 38-10(1)(c)
   Division 40
   section 195-1

Keywords
Goods and services tax
GST free
GST health
Section 38-7 - medical services
Section 38-10 - other health services
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  30 October 2002

ISSN: 1445-2782