Edited version of private ruling

Authorisation Number: 1011706151149

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: GST and other health services

Question 1

Is the supply of medicine GST-free under subsection 38-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when supplied by you for use after the consultation and treatment of the item of service that is listed under the table in subsection 38-10(1) of the GST Act?

Answer

Yes

Question 2

Are the supplies of supplements GST-free when prescribed and dispensed by you to a patient for use after the consultation and treatment of a health services that is listed under the table in subsection 38-10(1) of the GST Act?

Answer

Please refer to the reasons for decision.

Relevant facts and circumstances

You) are registered for goods and services tax (GST).

You are a registered doctor in other health services and you are registered under the state regulation.

The supply of the two other health services that you provide is generally accepted in the profession as being necessary for the appropriate treatment of the recipient of the supply.

During the services of one of the other health services you supply medicine to the patient for them to take away and use for their illness or disability.

You also sometimes supply goods such supplements during the services of one of the health services to the patients for to take away and use for their illness or disability.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(3)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-10(4)

Reasons for decision

Question 1

Summary

The supply of a medicine preparation is GST-free under subsection 38-10(3) of GST Act when supplied by you who is a recognised professional in more than one service listed in the GST Act for use after the consultation and treatment of such services.

Detailed reasoning

Subsection 38-10(1) of the GST Act provides that a supply is GST-free if:

· it is a service of a kind specified in the table in the subsection, or of a kind specified in the regulations, and

· the supplier is a recognised professional in relation to the supply of services of that kind, and

· the supply would generally be accepted , in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the recipient of the supply,

In order for your supply of more than one service listed in GST Act to be GST-free, you must satisfy all of the conditions under subsection 38-10(1) of the GST Act.

In your case:

Specified health service

Both the health services that you provide are listed under items of the table in subsection 38-10(1) of the GST Act and therefore you satisfy the requirement of the first dot point under subsection 38-10(1) of the GST Act.

'recognised professional'

As per the facts provided by you, you are considered as a recognised professional and therefore, you satisfy the second dot point under subsection 38-10(1) of the GST Act.

Generally accepted as being necessary for the appropriate treatment of the recipient of the supply

For the purposes of the third point under subsection 38-10(1) of the GST Act, the service must 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. In your case for a supply to be 'generally accepted' the particular service supplied and the circumstances in which it is provided must be generally accepted by the two health services that you provide. Therefore, it is one or the other health profession that ultimately determines which services are generally accepted as being necessary for the appropriate treatment of the recipient of the supply.

'Appropriate treatment' for the purposes of the GST legislation is considered to be established where the 'recognised professional' assesses the patient's state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that patient insofar as that recognised professional's particular area of training allows.

Appropriate treatment includes subsequent supplies in relation to this determined process and also includes preventative medicine

Pursuant to subsection 195-1 of the GST Act, the recipient of the supply is the entity to which the supply was made. Whilst in many circumstances this will be the patient, this will not always be the case. For example, a supply may be made to an insurance company.

As per the facts provided by you, it is considered that you are providing the services to patients who require your services and therefore, you satisfy the third dot point under subsection 38-10(1) of the GST Act.

This means that you satisfy all of the conditions under subsection 38-10(1) of the GST Act.

Subsection 38-10(3) and subsection 38-10(4) of the GST Act provide that a supply of goods will be GST-free where it is supplied in the course of supplying a GST-free health services.

Subsection 38-10(3) of the GST Act provides that a supply of goods is GST-free if:

· it is made to a person in the course of supplying to the person a service the supply of which is GST-free under subsection 38-10(1) of the GST Act (other than a service referred to in a particular item 8,9, 15 of the table in subsection 38-10(1) of the GST Act, and

· it is made at the premises at which the service is supplied.

Subsection 38-10(4) of the GST Act provides that a supply of goods is GST-free if

· it is made to a person in the course of supplying to the person a service referred to in item 8 or 9 of the table in subsection 38-10(1) of the GST Act, and

· it is supplied, and used or consumed, at the premises at which the service is supplied.

The phrase 'in the course of supplying a service' is interpreted to require that the goods are supplied at the same point in time at which a GST-free health service is supplied.

Furthermore, the supplied medicine preparation must also have been either:

· customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free service, and

· necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.

In your case, you advised the following:

· you are a recognised professional in two health services listed under items in the table of subsection 38-10(1) of the GST Act and you supply a medicine preparation to your patients who require one of the health service treatment

· you supply it at the same premises where you supply one of the health service treatment.

For the supply of medicine to be GST-free, the patient does not have to consume the medicine preparation at your consulting rooms provided it is:

· individually customised or manipulated for treating that particular patient's illness or disability, and

· it is essential for the specific treatment of the particular patient. and

This means provided all of the above conditions are satisfied and you have provided the medicine preparation for the patient to take away as it was essential for health service treatment of that particular patient, the medicine that you supplied at your premises will be GST-free under section 38-10(3) of the GST Act. (Please refer to the enclosed fact sheet on GST and other health services).

Question 2

Summary

Please refer to detailed reasoning

Detailed reasoning

As mentioned in answer to Question 1, the goods must be supplied at the same point in time at which a GST-free health service is supplied and in addition the supplement must also have been either:

· customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free health service, and

· it is essential for the specific treatment of the particular patient.

Provided the supplements that you provide meets all of the requirements above, then they will be GST-free if they are consumed away from your premises.

However, in the case of a commercial line medicine, the requirements of first dot point will not be met as they would not have been customised or manipulated for the exclusive treatment of the illness or disability of that particular patient. Therefore, the supply of supplements will not be

GST-free as they have not met all of the conditions stipulated above.