Edited version of your written advice

Authorisation Number: 1013096581977

Date of advice: 27 September 2016

Ruling

Subject: GST and services

Question 1

Is GST payable on your services as a locum to an Australian government agency?

Answer

GST is not payable on GST-free supplies. The supply of your services to an Australian government agency is GST-free under subsection 38-60(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless the parties have agreed for your services not to be treated as GST-free.

Question 2

Do you need to include a GST amount on your tax invoice for your locum services?

Answer

A supplier may issue a document headed 'tax invoice' for a supply that is not a taxable supply if it shows that the price of the supply does not include GST. On your invoice for your locum services, you could include a statement on the document that the price of the supply does not include GST or show the GST amount as nil or zero.

Relevant facts and circumstances

• You are a practitioner and provide locum services to Australian government agencies.

• You are contracted as a locum through a locum agency but there is no money exchange between you and the locum agency. You do not have a written contract with the locum agency.

• The locum agency organises work for you with the Australian government agency. If you accept a work contract, you sign a contract directly with the Australian government agency.

• Typically, you would enter into a relevant Agreement for the provision of your services to the Australian government agency.

• Under the Agreement, you agree to provide related services to patients at the specified sites.

• You are engaged as an independent contractor and not an employee when you contract to provide locum services to the Australian government agency.

• You are paid directly by the Australian government agency. You are required to submit regular invoices for your services. The invoice must comply with the statutory requirements of a Tax Invoice and must specify the amount of GST payable. You only get paid if you invoice them.

• You get paid the contracted 'per shift' amount regardless of how many patients you see. You do not seek payment from the patients.

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

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 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 subsection 38-20(1)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-60(3)

A New Tax System (Goods and Services Tax) Act 1999 subsection 38-60(4)

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

Reasons for decision

GST is payable on taxable supplies. GST is not payable where a supply is GST-free or input taxed.

An entity makes a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if:

• it makes the supply for consideration;

• the supply is made in the course or furtherance of an enterprise that it carries on;

• the supply is connected with the indirect tax zone (that is, Australia);

• the entity is registered or required to be registered for GST; and

• the supply is neither GST-free nor input taxed.

There is no provision in the GST Act under which your supply of locum services to the Australian government agency is input taxed.

A supply of a service is GST-free under subsection 38-7(1) of the GST Act.

Section 195-1 of the GST Act defines medical service as

• a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; 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.

'Recipient' in relation to a supply, is defined in section 195-1 of the GST Act to mean the entity to which the supply was made. In some circumstances, the 'recipient of the supply' is not the patient, but a third party.

In the circumstances where you are contracted by a third party to provide medical services to a patient then the third party is considered to be the recipient of your supply, even though the patient is given the actual treatment.

From 1 July 2012, where the third party (payer) is an Australian government agency, the supply by the medical practitioner to the Australian government agency may be GST-free under subsection 38-60(3) of the GST Act.

Subsection 38-60(3) of the GST Act provides that if a supply (the underlying supply) by a health care provider to an individual (the patient) is either wholly or partly GST-free under Subdivision 38-B, then a supply of the service of making the underlying supply by the health care provider to the Australian government agency is GST-free to the same extent as the underlying supply. Subsection 38-7(1) of the GST Act is under Subdivision 38-B.

In your case, where an Australian government agency contracts you to provide services to the patients at the nominated sites, you make a supply of services to an Australian government agency under the relevant Agreement.

You are paid by the Australian government agency. The supply you make to the Australian government agency is a supply of a service of making one or more other supplies of services to individuals. The supplies that you make to the patients at the nominated sites are medical services that are GST-free under subsection 38-7(1) of the GST Act because:

• you are a practitioner, and

• the services that you supply to the patients would be generally accepted in the medical profession as being necessary for the appropriate treatment of the recipients of those supplies.

Therefore, your supply of services to the Australian government agency under the relevant Agreement is GST-free because all the requirements of subsection 38-60(3) of the GST Act are met.

However, under subsection 38-60(4) of the GST Act, the parties may agree for the supply to the payer, or supplies of a kind that include that supply, not to be treated as GST-free. Entering into such an agreement is a contractual matter between the relevant parties.

In your case, the relevant Agreement sets out the invoice requirements that the invoice must specify the amount of GST payable.

Goods and services tax ruling GSTR 2013/1 Goods and services tax: tax invoices provides the following information which is relevant in your situation.

Documents headed 'tax invoice' for supplies that are not taxable

20. A tax invoice cannot include words that indicate that the price of what is supplied is inclusive of GST to the extent the supply is not a taxable supply. However, a supplier may issue a document headed 'tax invoice' for a supply that is not a taxable supply if it shows that the price of the supply does not include GST. For example, the supplier could include a statement on the document that the price of the supply does not include GST or show the GST as nil or zero. Alternatively, the supplier could cross out the words 'Tax Invoice' or the word 'Tax'.

Therefore, as the supply of your locum services to the Australian government agency is GST-free under section 38-60(3) of the GST Act, you could show the GST on your invoice as nil or $0, unless there is an agreement between you and the Australian government agency for the supply not to be treated as GST-free.

Where you and the Australian government agency have agreed for your supply not to be treated as GST-free, the supply would be a taxable supply. GST is payable on a taxable supply and you are liable for GST on taxable supplies that you make. The amount of GST on a taxable supply is 10% of the value of the taxable supply.