Goods and Services Tax Industry Issues
Health Industry Partnership

Are Overseas Student Health Cover policies GST-free?

• Please note that the PDF version is the authorised version of this ruling.
  This publication is extracted from the Health Industry Partnership - issues register. See issue 6.a.3 of that register. This publication should be read in conjunction with the related content of that register where further context is required.

This publication provides you with the following level of protection: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

Private health insurance is GST-free. Does this include Overseas Student Health Cover policies?

1. Section 38-55(1) of the GST Act states that a supply of private health insurance is GST-free.

2. Private health insurance is defined in section 195-1 of the GST Act as: insurance provided under a contract of insurance that was entered into by a registered organisation (within the meaning of Part VI of the National Health Act 1953) in the course of carrying on health insurance business (within the meaning of subsection 67(4) of that Act).

3. To satisfy this definition, the contract of insurance must:

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be entered into by a registered organisation under the National Health Act 1953, and

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be in the course of carrying on a health insurance business.

4. If the organisation is not registered, the supply of private health insurance will not be a GST-free supply under section 38-55.

5. If the organisation is registered, it must be in the course of carrying on health insurance business.

6. For the purposes of the definition of 'health insurance business' in section 67(4) of the National Health Act 1953, regulation 48(2B) of the National Health Regulations 1954 provides that 'health insurance business' does not include the business of undertaking liability by way of insurance if the liability is undertaken by a registered organisation under an overseas student health insurance contract.

7. Accordingly, even if an organisation is registered, Overseas Student Health Cover does not satisfy the definition of 'health insurance business' and is not GST-free private health insurance for the purposes of section 38-55.

References