Edited version of private advice

Authorisation Number: 1051560216661

Date of advice: 27 August 2019

Ruling

Subject: GST and supplies medical repatriation service

Question

Is your supply of medical transport service for patients overseas and in Australia GST-free?

Answer

The supply of the service consists of various components that are treated as follows:

This ruling applies for the following period:

27 August 2019 to 27 August 2023

Relevant facts and circumstances

You are registered for GST.

You operate a business that involves arranging safe transport home for Australians that have either become unwell or have been injured overseas. Transport takes place under the care of either an Australian registered doctor, nurse or paramedic team. They provide medical care from the time the patient is collected from the hospital until either care is handed over to another medical team or the patient is home.

You also provide the services to foreign nationals transporting them to their home country.

Your clients may either be in Australia or based overseas and include insurance companies, private individuals, or hospitals.

Your client contacts you with information about the patient's circumstances including their location, illness or injury, and the required timeframe to medically transport the patient. You will then provide a quote which is broken down as follows:

1.     Medical case management fee;

2.     Escort wages;

3.     Travel; and

4.     Incidentals

Incidentals can include:

·        Ground transfer

·        Escort accommodation overseas

·        Escort meals and transport overseas

·        Medical equipment

·        International airfare

·        Insurance for escort

·        Medical visas for the patient

Medical case management fee is a blanket fee for preparation of medical case management.

You employ your own doctors, nurses and paramedics. They travel to the patient and conduct a thorough assessment of their condition.

You organise ground transport through providers either in Australia or overseas. Where air ambulance is required, you organise this through specialist air ambulance providers.

For flights, you choose the carrier following assessment of patient information. Your decision is made based on a number of factors to ensure patient safety and comfort during the flight.

You also assist in obtaining emergency medical visas where required.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 38-7

A New Tax System (Goods and Services Tax) Act 1999 section 38-10

A New Tax System (Goods and Services Tax) Act 1999 section 38-45

A New Tax System (Goods and Services Tax) Act 1999 section 38-185

A New Tax System (Goods and Services Tax) Act 1999 section 38-190

Reasons for decisions

Section 9-5 of the A New Tax System (Goods and Services tax) Act 1999 (GST Act) states:

You make a taxable supply if:

(a)   you make the supply for *consideration; and

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

(c)   the supply is *connected with the indirect tax zone; 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.

(* denotes a term defined under section 195-1 of the GST Act).

You make the supply of medical transport service for consideration and in the course of your enterprise. The supply is connected with Australia. Furthermore, you are registered for GST. The requirement in paragraphs 9-5(a) to 9-5(d) of the GST Act are satisfied. Therefore, your supply is a taxable supply unless it is GST-free or input taxed.

Your supply consists of identifiable parts which are treated separately for GST purposes. We consider that you supply the following in your own right and the rest of the components of your supply are merely arranged by you on behalf of your customers:

Medical case management

Subsection 38-190(1) of the GST Act provides that certain supplies of things, other than goods or real property, are GST-free.

Item 3 in the table in subsection 38-190(1) of the GST Act (Item 3) provides that a supply is GST-free if:

(a)   it is made to a recipient who is not in the indirect tax zone when the thing supplied is done; and

(b)   the effective use or enjoyment of which takes place outside the indirect tax zone

For the purpose of paragraph (a) of Item 3, a supply is taken to be made to a recipient who is not in the indirect tax zone if:

Where the supply is made under an agreement entered into with an Australian resident and the supply is provided to another entity outside the indirect tax zone, the supply is taken be made to a recipient who is not in the indirect tax zone for the purpose of paragraph (a) of Item 3.

For the purpose of paragraph (b) of Item 3, we take the view that the place where a supply is used or enjoyed is the place where the supply is provided to the entity. Thus, if the supply is provided to an entity outside the indirect tax zone, the effective use or enjoyment of the thing supplied takes place outside the indirect tax.

Therefore, if you prepare the medical case management while the patient is outside the indirect tax zone, this component of your supply would be GST-free.

Escort wages

You advised that the escort can be either be a doctor, a nurse or paramedic or any combination of the three.

Patient is in the indirect tax zone

The supply of service by the doctor would be GST-free under section 38-7 of the GST Act if the supply is of a medical service as defined in the GST Act.

'Medical service' means:

(a)   a service for which Medicare benefit is payable; or

(b)   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.

The supply of service by the nurse would be GST-free if the nurse is a recognised professional in relation to the supply of nursing services; and the service would generally be accepted in the nursing profession as being necessary for the appropriate treatment of the recipient of the supply.

The supply of service by the paramedic would be GST-free if the paramedic is a recognised professional in relation to the supply of paramedical services; and the service would generally be accepted in the paramedical profession as being necessary for the appropriate treatment of the recipient of the supply.

The services by the doctor, nurse, or paramedic are not 'for the treatment of the recipient' of the supply if the client who acquires your services is not the patient, a public hospital or an insurer.

Patient is outside the indirect tax zone

Where the services by the doctor, nurse or paramedic are done while the patient is outside the indirect tax zone, the supply of the services would be GST-free under item 3.

Escort accommodation, meals and transport outside the indirect tax zone

Where you on-charge the cost of accommodation, meals and transport incurred for your employees who escorted the patient, the amount on-charged becomes part of the consideration for your supply of services.

As you incur these costs for your employees when the services are provided while the patient is outside the indirect tax zone, the amount on-charged is consideration for your supply that is GST-free under Item 3.

Medical equipment

The supply of medical aids and appliances is GST-free under section 38-45 of the GST Act if:

(a)   it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and

(b)   the thing supplied is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

Where the medical equipment is not covered by Schedule 3, the supply of the equipment would be GST-free under section 38-185 of the GST Act if you export the equipment within the specified period of 60 days.

The supply of goods made outside the indirect tax zone would not be connected with the indirect tax zone under section 9-25 of the GST Act unless the supply involves the goods being brought to the indirect tax zone and the supplier imports it.

Therefore, if you supply the medical equipment while the patient is outside the indirect tax zone, the supply would not be taxable under section 9-5 of the GST Act as it is not connected with the indirect tax zone.

Insurance for escort

Where you on-charge the cost of insurance for your employees who escorted the patient, the amount on-charged becomes part of the consideration for your supply of services.

Therefore, if your supply of services provided by your employees to the patient is taxable the amount on-charged would be subject to GST. Where the supply is GST-free, the amount on-charged would not be subject to GST.

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