Edited version of private ruling

Authorisation Number: 1011454973657

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Ruling

Subject: GST and ambulance services

Question

Are your supplies of non-emergency patient transport services GST-free supplies under subsection 38-10(5) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer: No.

Your supplies of non-emergency patient transport services are not GST-free supplies under subsection 38-10(5) of the GST Act.

Relevant facts and circumstances

You are registered for GST.

You are a privately owned enterprise operating from locations in Australia.

You operate a business of providing non-emergency transport services to clients such as public and private hospitals, and numerous public and private enterprises.

You hold a non-emergency patient transport licence.

You are governed and licensed to operate in a particular State by specific regulatory provisions. A particular body regulates non-emergency patient transport providers for the State.

Your non-emergency transport services are provided by a fleet of vehicles together with some medical equipment. The patients transported are sick, injured and/or disabled persons.

The vehicle used for each transport is dependent on the service requested by your clients. The type of service requested determines the classification and qualification of employee and level of client care required to service the transport.

You have various client transport professionals classified in accordance with relevant protocols for providing non-emergency patient transport.

You provide non-emergency transport services to third parties such as hospitals and third party bodies pursuant to a written contract. You have agreements with hospitals to provide their patients with transport to another hospital, or from their home to a hospital (and vice versa).

You have advised that you also provide non-emergency transport services where a hospital arranges the services on a patient's behalf and advises that a particular government entity will be paying for the transport service. The client would usually be in hospital as a result of an accident. If the hospital determines that the patient needs to be transported to another hospital or to a specialist, for tests or treatment, they will contact you and arrange for the transportation of those patients. You invoice the government entity directly for the transport services you provide, but there is no written contract between you and the government entity to provide these services to eligible clients.

You are not engaged by, nor do you enter into any arrangement directly with, the patients themselves to provide patient transport. You advised that you would pursue outstanding accounts directly with the government entity and would not take any recovery action against the patient.

Reasons for decision

In accordance with section 9-40 of the GST Act you are required to pay the GST payable on any taxable supply that you make. Section 9-5 of the GST Act provides that you make a taxable supply if:

a) you make the supply for consideration

b) the supply is made in the course or furtherance of an enterprise that you carry on

c) the supply is connected with Australia, and

d) you are registered, or required to be registered.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Division 38 of the GST Act lists some supplies that are GST-free. Subsection 38-10(5) of the GST Act provides that a supply provided by an ambulance service in the course of the treatment of the recipient of the supply is GST-free. Therefore to be GST-free, supplies by an ambulance service must be:

(i) provided by an ambulance service, and

(ii) in the course of the treatment of the recipient of the supply.

An 'ambulance service' is not defined in the GST Act. However, ATO Interpretative Decision ATO-ID-2005/185 explains that after consideration of the relevant State, Territory and Federal legislation, we consider an ambulance service to be:

1. an entity that is primarily established for the purpose of rendering, and which does render, first aid or emergency treatment to, and the transport of, sick and injured persons

2. an entity that is permitted to operate as an ambulance service under a State or Territory law in the State or Territory in which it operates, or

3. an entity that is permitted to provide aerial ambulance services pursuant to section 27 of the Civil Aviation Act and regulation 206 of the Civil Aviation Regulations 1988.

Part (3) of the definition of an ambulance service does not apply to you as you do not provide aerial ambulance services. You are not an entity described in Part (2) of the definition as you are not authorised to operate as an ambulance service by the State. So, it is necessary to consider whether you are an ambulance service in accordance with Part (1) of the definition.

In order to determine if you meet the criteria of Part (1) of the definition of an ambulance service, it is necessary to examine:

· firstly, whether you render first aid or emergency treatment to, and transport sick (and injured) persons; and

· secondly, whether you are an entity that is 'primarily established' to provide both those services.

In your case, you are an entity that provides patients with non-emergency patient transport services from one hospital to another, and from their home to a hospital (and vice versa). You are not authorised by the State to provide emergency services, but rather you are licensed to provide non-emergency patient transport services. Although you are capable of providing first aid and emergency treatment to the patients you transport, if and when necessary, you are primarily established to transport patients in non-emergency situations. Hence, you are not an entity that is 'primarily' established to provide first aid or emergency treatment, and the transport of, sick and injured persons. As a consequence, you do not meet Part (1) of the definition of 'ambulance service'.

You are not considered to be an 'ambulance service' for the purposes of subsection 38-10(5) of the GST Act. Consequently, your supplies of non-emergency patient transport services are not GST-free supplies in accordance with subsection 38-10(5) of the GST Act.

While it is not necessary to further consider whether your supplies of non-emergency patient transport services are GST-free supplies, for the supply of ambulance services to be GST-free under subsection 38-10(5) of the GST Act, the services must be provided in the course of treating the recipient of that supply. A supply can only be one of 'treatment' if it is made to the person requiring that treatment. By its nature 'treatment' cannot be something that is supplied to a business entity.

Accordingly, where the ambulance services are supplied under an agreement with a third party that is a business entity, and the terms of the agreement are such that the third party is the recipient of the supply, that supply to the third party is not covered by subsection 38-10(5) of the GST Act. This is because as a business entity, the third party cannot be in receipt of 'treatment'.

In your circumstances, the facts support that while the transportation services may be 'provided' to the patient, the supply is not 'made' to the patient. Relevantly, paragraphs 131 and 132 of Goods and Services Tax Ruling GSTR 2006/9 explain:

131. 'Made' in the context of 'a supply made' takes its meaning from the definition of 'recipient' in section 195-1:

Recipient, in relation to a supply, means the entity to which the supply was made.

132. 'Provide' is used to contrast with 'made' - it distinguishes between the contractual flow of the supply to the recipient (the entity to which the supply is made) and the actual flow of the supply to another entity (the entity to which the supply is provided).

You advised that there is no contractual relationship or binding agreement between you and the patient, the patient does not have any control or direction over the transport arrangements, the patient does not have any recourse with you in the event of any dispute and the patient is not liable to pay for the services.

Consequently, even if you had met the definition of an ambulance service (which we have determined that you do not), on the basis of the facts provided your supply of non-emergency transport services would still not be GST-free.

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