Edited version of your written advice

Authorisation Number: 1012696179385

Ruling

Subject: Medical services

Question

Are the services provided to your patients GST-free?

Advice

Yes

Relevant facts and circumstances

• You are registered for goods and service tax (GST).

• You are a registered nurse in Australia.

• You carry on a business of providing services in your capacity as a registered nurse.

• You are a trained nurse in your field of expertise

• You hold membership to an Australian nurses association.

• You confirmed that Medicare benefits are not payable for your services.

Reason for decision

Under subsection 38-7(1) of the A New Tax System (Goods and Service Tax) Act 1999 (GST Act), the supply of a medical service is GST-free. The meaning of 'medical service' is defined under section 195-1 of the GST Act as:

• a service for which a Medicare benefit is payable under Part II of the Health Insurance Act 1973 (HI Act), or

• 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.

You advised that Medicare benefit is not payable for your services to the patient. Therefore, your services do not fall within the first limb of the meaning of medical service under section 195-1 of the GST Act.

The nest issue is to determine whether you are making supplies under the second limb of the meaning of medical service under section 195-1 of the GST Act. This requires the services to be provided by (or on behalf of) a medical practitioner and the service is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

The term medical practitioner is defined in section 195-1 of the GST Act to mean a person who is a medical practitioner for the purposes of the HI Act. The meaning of medical practitioner is defined in the HI Act as:

medical practitioner means a person registered or licensed as a medical practitioner under a law of a State or Territory that provides for the registration or licensing of medical practitioners…

You advised that you are a registered nurse in Australia and you carry on a business of providing services in your capacity as a registered nurse.

The next issue is to consider whether your services are appropriate treatment for your patients.

Appropriate treatment

The meaning of appropriate treatment is outlined in Australian Taxation Office (ATO) website www.ato.gov.au. For GST purposes, a medical practitioner is providing appropriate treatment when they use their professional skills to:

• assess a patient's health

• work out a course of action to preserve, restore or improve the patient's physical or psychological wellbeing, as far as their training allows and

• provide treatment that are generally accepted by their medical profession as being appropriate for the patients and

Appropriate treatment includes preventative medicine.

Therefore appropriate treatment is established where the medical practitioner assesses the patient's state of health and determines a process (treatment) to preserve, restore or improve the patient's physical or psychological wellbeing and this includes treatment for preventive medicine.

In addition, the definition requires the appropriate treatment must be 'generally accepted in the medical profession' as being necessary. The words 'generally accepted in the medical profession' indicate that it will ultimately be the medical profession that determines what services are generally accepted medical services.

You are a trained nurse in Australia and hold membership to an Australian nurses association. You provide your services in your capacity as a registered nurse. Your services are appropriate treatment for your patients. Therefore your services are medical services under the second limb of the meaning of medical services as outlined in section 195-5 of the GST Act.

However, under subsection 38-7(2) of the GST Act, a supply of a medical service is not GST-free under subsection 38-7(1) of the GST Act if:

• it is a supply of a professional service rendered in prescribed circumstances within the meaning of regulation 14 of the Health Insurance Regulations1975 (HI Regulations) made under the HI Act (other than the prescribed circumstances set out in regulations 14(2)(ea), (f) and (g)); or

• it is rendered for cosmetic reasons and is not a professional service for which a Medicare benefit is payable under Part II of the Health Insurance Act 1973 .

Based on the information provided, we consider your services are not excluded from being GST free medical services by subsection 38-7(2) of the GST Act. Therefore, the medical services you provide to your patients are GST-free under subsection 38-7 (1) of the GST Act.

Please note: From 1 July 2012, where a supply of a medical service made to a patient is GST-free, that supply will also be GST-free where the recipient of the supply is an:

• insurer in settling a claim under an insurance policy

• operator of a statutory compensation scheme

• operator of a compulsory third party scheme

• Australian government agency.

You may find more information on medical services from the Australian Taxation officer website www.ato.gov.au