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Ruling

Subject: goods and services tax (GST) and medical report provided to insurer

Question

Is GST payable where you received certain fees from the insurer?

Answer

Yes.

Relevant facts and circumstances

You are registered for GST.

You supply orthopaedic surgeon services.

You are a medical practitioner.

You charged the insurer certain fees. The invoices for these fees containing the following information:

· a certain amount of money for report/case conference - opinion on file request; item (reference number); issue date (date); service date (date).

You provided reports containing your medical opinions on certain individuals to the insurer in return for the fees. The fees were not in respect of any conferences.

Medicare benefit was not payable in respect of the fees.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

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

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

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

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

Summary

You did not make GST-free supplies of medical services in return for the fees, as medicare benefit was not payable in respect of the fees, and the fees were not consideration for supplies of services involving treating the recipient of the supplies or assessing the recipient of the supplies for the purposes of determining treatment.

GST is payable where you received the fees because you satisfied all of the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

GST is payable by you where you make a taxable supply.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

· you make the supply for *consideration; and

· the supply is made in the course or furtherance of an *enterprise that

· you *carry on; and

· the supply is *connected with Australia; and

· 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 in section 195-1 of the GST Act)

In your case, you satisfied the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. You supplied services for consideration and you made these supplies in the course or furtherance of an enterprise that you carry on. Additionally, these supplies were connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your supplies were input taxed.

Therefore, what remains to be determined is whether your supplies were GST-free.

Subsection 38-7(1) of the GST Act provides that a supply of a *medical service is GST-free.

Medical service is defined in section 195-1 of the GST Act as:

(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.

Medicare benefit was not payable in respect of the fees. Therefore, you did not supply medical services under paragraph (a) of the definition of medical service in section 195-1 of the GST Act.

You are a medical practitioner.

We shall now consider whether the supplies you made were for the treatment of the recipient of the supply.

Issue 1.a of the Health Industry Partnership - Issues Register provides the meaning of 'generally accepted in the medical profession as being necessary for the appropriate treatment'. It states:

Meaning of 'generally accepted in the medical profession as being necessary for the appropriate treatment'.

The above requires interpretation as to what is meant by 'generally accepted' and 'appropriate treatment'.

'Appropriate treatment' will be established where the practitioner assesses the recipient's state of health and determines a process to pursue in an attempt to preserve, restore or improve the physical or psychological wellbeing of the recipient and will include subsequent supplies for the assessed process.

'Appropriate treatment' includes the principles of preventative medicine.

In addition, the definition requires the treatment must be generally accepted in the medical profession as being necessary. The particular service being provided by the *medical practitioner or *approved pathology practitioner and the circumstances in which it is provided must be generally accepted by the medical profession. The words 'generally accepted in the medical profession' indicate that it will ultimately be the medical profession that determines what services will be generally accepted.

You provided reports containing your medical opinions to the insurer in return for the fees in question. The supplies you made to the insurer did not meet the requirement at paragraph (b) of the definition of medical service in section 195-1 of the GST Act, as they did not involve treating the recipient of the supplies (which was the insurer) or assessing the recipient's state of health for the purpose of determining treatment. Instead, the supplies you made in return for the fees were made for insurance purposes.

Therefore, you did not make GST-free supplies of medical services in return for the fees.

There are no other provisions in the GST Act under which your supplies to the insurer were GST-free.

Therefore, as all of the requirements of section 9-5 of the GST Act were satisfied, you made taxable supplies to the insurance entity. Hence, GST is payable on the fees.