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Edited version of your written advice
Authorisation Number: 1012862866475
Date of advice: 19 August 2015
Ruling
Subject: GST and exercise medical services
Question
Are the services you provide to the medical business subject to the goods and services tax (GST)?
Answer
Yes.
Relevant facts and circumstances
You work on a contract basis to treat clients for another party to provide medical services to their clients.
You have an ABN and are registered for GST.
Your contract defines that you would receive specific fees for the type of clients serviced (i.e. Medicare, WorkCover, DVA).
You invoice the other party an amount inclusive of GST.
Your services are not provided on behalf of a medical practitioner or approved pathology practitioner.
You are not a medical practitioner or an approved pathology practitioner for the purposes of the Health Insurance Act 1973.
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 subsection 38-7(1)
A New Tax System (Goods and Services Tax) Act 1999 section 195
Reasons for decision
Subsection 38-7(1) of the GST Act provides that a supply of a 'medical service' is GST-free.
The term medical service is defined in section 195-1 of the GST Act to mean:
(a) a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973: 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.
You advised that you and another party have entered into a contract whereby you provide medical services to them. You then invoice the other party for your services, inclusive of GST.
In this arrangement, there are two separate transactions taking place. These are:
• the supply of medical services by you to the medical business
• the supply of medical services by the medical business to the patient.
In relation to the first transaction you are supplying medical services to the other party. There is no Medicare benefit payable in relation to this supply. Furthermore, as your supply is made to the other party and not the patient, it cannot be said that your supply is necessary for the appropriate treatment of the recipient of the supply.
Your supply does not meet the definition of medical service as defined in section 195-1 of the GST Act and is not GST-free under section 38-7 of the GST Act.
Section 9-5 of the GST Act provides that you make a taxable supply if you make the supply for consideration; in the course or furtherance of an enterprise that you carry on; the supply is connected with the indirect tax zone (Australia) and you are registered or required to be registered for the GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
All of the elements of section 9-5 of the GST Act must be present for a supply to be a taxable supply.
In your case you provide medical services to the other party and invoice them an amount inclusive of GST for your services, you are registered for GST and your supplies are connected to Australia. Accordingly, your supplies of services are taxable.
Therefore, the example provided in relation to how you invoice the other party is correct.