ATO Interpretative Decision

ATO ID 2005/330

Goods and Services Tax

GST and hospital treatment
FOI status: may be released

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Issue

Is the entity, a supplier of hospital care services, making a GST-free supply under subsection 38-20(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies hospital care services to a patient recovering from general medical conditions?

Decision

Yes, the entity is making a GST-free supply under subsection 38-20(1) of the GST Act, when it supplies hospital care services to a patient recovering from general medical conditions.

Facts

The entity is a registered private hospital. The entity is providing hospital care to patients recuperating from general medical conditions. The hospital care supplied involves accommodation and nursing services.

The hospital care is not related to a supply of a professional service that is not GST-free because of subsection 38-7(2) of the GST Act

The entity is registered for goods and services tax (GST).

Reasons for Decision

Under subsection 38-20(1) of the GST Act, a supply of hospital treatment is GST-free.

'Hospital treatment' is defined in section 195-1 of the GST Act as having the meaning given by subsection 67(4) of the National Health Act 1953. 'Hospital treatment' is defined in subsection 67(4) of the National Health Act to mean:

accommodation and nursing care, whether provided for the purpose of permitting the provision of professional attention or, in the case of a nursing-home type patient, as an end in itself, and includes:

(a)
the provision at, or on behalf of, a hospital of relevant health services to a patient of the hospital; and
(b)
the provision at a hospital of a facility for a patient of the hospital; and
(c)
a prosthesis provided as part of an episode of hospital treatment.

Accordingly, 'hospital treatment' covers supplies of accommodation and nursing services made by the entity to its patients.

However, subsection 38-20(2) of the GST Act provides that a supply of hospital treatment is not GST-free to the extent that it relates to a supply of a professional service that, because of subsection 38-7(2) of the GST Act, is not GST-free.

In this case subsection 38-20(2) of the GST Act does not apply as the services that the entity provides do not relate to a supply of a professional service that is not GST-free because of subsection 38-7(2).

Therefore, the entity is making a GST-free supply of hospital treatment under subsection 38-20(1) of the GST Act.

Date of decision:  15 November 2005

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   subsection 38-7(2)
   subsection 38-20(1)
   subsection 38-20(2)
   section 195-1

National Health Act 1953
   subsection 67(4)

Related ATO Interpretative Decisions
ATO ID 2001/400

Keywords
Goods and services tax
GST free
GST health
Section 38-20 - hospital treatment
Section 38-7 - medical services

Business Line:  GST

Date of publication:  25 November 2005

ISSN: 1445-2782

history
  Date: Version:
You are here 15 November 2005 Original statement
  18 May 2007 Archived

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