Edited version of private advice

Authorisation Number: 1052182504158

Date of advice: 20 October 2023

Ruling

Subject: GST - medical services

Question

Is the supply of Medical Services (as defined in the facts) by the Doctor to Patient X GST-free under section 38-7 of the A New Tax System (Goods and services Tax) Act 1999 (GST Act)?

Answer

Yes.

Provided the supply of the Medical Service by the Doctor are generally accepted in the medical profession as being necessary for the appropriate treatment of Patient X the Commissioner accepts that the supply is GST-free under section 38-7 of the GST Act.

Question 2

Is the payment received by the Doctor from Patient X for the medicines consideration for a GST-free supply made by the Doctor to Patient X under section 38-7 of the GST Act and alternatively, under section 38-50 of the GST Act?

Answer

No.

The payment received by the Doctor from Patient X is not consideration for a GST-free or taxable supply made by the Doctor to the Patient X. This is because the supply of the medicines is made by a third party (i.e. the chemist) to Patient X.

Consequently, the Doctor does not have to report any GST liability in respect of the supply of medicines.

This ruling applies for the following period:

1 July 20XX to quarter ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are a medical practitioner, registered as a medical practitioner and your registration has never been suspended or cancelled.

You have worked in clinics and your own business prior to moving interstate to practise as a medical practitioner.

You have been registered for GST since 1 July 20XX.

You provide medical services including medical treatments to Patient X and these medical treatments are still continuing for the financial year ending 30 June 20XX. Relevantly, You provides the following medical services to Patient X to assist Patient X with a number of chronic medical issues:

•         management and administration of Patient X's medications;

•         acute assessment and investigation of developing medical issues;

•         seizure management;

•         specialist liaison and coordination of care;

•         on call service for medical emergencies; and.

•         healthy living advice.

For the purposes of this private ruling response we refer to the above list as the 'Medical Services'

You provide around the clock medical services to Patient X at the home of Patient X.

The chronic medical issues experienced by Patient X that are subject of the above Medical Services provided by You are:

•         recurrent seizures;

•         recurrent ear, gut and skin infections;

•         headaches and abdominal discomfort;

•         autism; and

•         obsessive-compulsive disorder.

You are of the view that the above Medical Services provided to Patient X preserve, restore and improve the physical health of Patient X and are beneficial to Patient X in treating the relevant medical issues or otherwise in managing the symptoms arising from those medical issues.

You are also of the view that the above Medical Services and treatments are generally acceptable in the medical profession as necessary for the appropriate treatment of Patient X's medical conditions.

The Medical Services provided by You to Patient X were not rendered for cosmetic reasons.

The Medical Services provided by You to Patient X were not professional services rendered in any of the prescribed circumstances listed in Regulation 14 of the Health Insurance Regulations made under Health Insurance Act 1973 (Cth) (other than the prescribed circumstances set out in regulations 14(2)(ea), (f) and (g )).

Medicare benefits are not payable for the supply of Medical Services and medicine provided by You to Patient X. Patient X does not receive and has never received any Medicare benefits for the Medical Services and medicine provided by You.

You continue to provide the following medicine to Patient X during the income years ended 30 June 20XX and 30 June 20XX:

•         XXX;

•         YYY; and

•         ZZZ.

(together the medicines)

The supply of the medicines listed above are made by a chemist (upon receipt of a prescription issued by You) to Patient X. However, You provide the consideration for the medicines on behalf of Patient X and recovers the amount when he invoices Patient X. Relevantly you have stated:

in the vast majority cases the Patient in fact takes the prescription to the Chemist, obtains the medicine from the chemist directly and pays for it themselves. However, in the minority of cases

the Doctor provides payment to the supplier of the medicine (who directly supplies the medicine to the Patient) and then recovers the cost through the charges he invoices to the Patient.

The provision of the medicines to Patient X was made at the premises at which the Medical Service was supplied to Patient X.

The medicines described above are designated for human use and consumption. You provide the medicine described above to Patient X for private and domestic use and consumption by Patient X.

The medicine provided to Patient X was supplied on prescription in SS state. The medicine can only be supplied in SS state on a prescription under the requirements of SS state law and is otherwise restricted under SS state law. Specifically, the medicine provided to Patient X is listed as either a prescription-only medicine under Schedule 4 of the Standard of the Uniform Scheduling of Medicines and Poisons (SUSMP) dated July 2020 (or the Poisons Standard) or a controlled drug under Schedule 8 of the SUSMP, being:

•         DDD is a prescription-only medicine listed under Schedule 4 of the SUS\MP, on the basis that the DDD that was administered to Patient X met the specific requirements of the medicine in Schedule 4 of the SUSMP, that is:

DDD medication in preparations for therapeutic use where:

a) DDD medication comprises 98 per cent or more of the total DDD content of the preparation; and

b) any DDD medication, other than DDD2 must be only those naturally found in DDD and comprise 2 per cent or less of the total DDD content of the preparation.

•         YYY is a controlled drug listed under Schedule 8 of the SUSMP, on the basis that the THC that was administered to Patient X met the specific requirements of the listed drug in Schedule 8 of the SUSMP, that is:

YYY2 when prepared and packed for therapeutic use.

•         ZZZ is listed as a prescription-only drug under Schedule 4 of the SUSMP.

The medicine provided to Patient X is not a pharmaceutical benefit (within the meaning of Part VII of the National Health Act 1953).

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 38-7.