When the GST regime was introduced on 1 July 2000 medical and health care services were to be treated as being GST Free. This means that no GST was payable on providing services such as general practice consultations, physio appointments and dental appointments. However, as with everything in tax things are never that simple. For the purposes of this article we will assume that you are required to be registered for GST.
Broadly speaking medical services are any service for which a Medicare benefit is payable. The legislation does also allow for other services (which are not eligible for the Medicare benefit) to be also treated as a medical service if it:
- Is supplied by or on behalf of a medical practitioner or approved pathology practitioner; and
- It is generally accepted by the medical profession as being necessary for the appropriate treatment of a patient (read more about how to determine whether something is an appropriate treatment)
If you are providing these services directly to a patient it will be GST Free (for example, a GP providing a consultation to a patient and charging them at the end of the consultation).
Other Health Services
The GST Legislation also allows for listed health services to be treated as GST Free. These services are:
- an Aboriginal or Torres Strait Islander health service
- audiology or audiometry
- herbal medicine (including traditional Chinese herbal medicine)
- occupational therapy
- speech pathology
- speech therapy
- social work.
Additionally, these services must be conducted by a recognised health professional (in most cases a recognised health professional is a person who is registered, permitted or approved under state or territory law to provide a health service) and again they must be accepted in the relevant health professional as an appropriate treatment.
If you are providing these services directly to a patient it will be GST Free (for example, a physio providing a consult to a client and charging them at the end of the session).
Providing Medical and Health Services as a Contractor
If you are providing medical and health services as a contractor then the income you receive is not GST Free and GST must be collected for these services. In these scenarios you are no longer providing a service directly to a patient but to a third party who has engaged you to treat patients on its behalf.
An example of this occurs when a physio undertakes work as a contractor for various sports teams. The physio still sees and treats patients (generally the players), however, they are providing a contract service to each sport teams and not to each individual patient. In this scenario, the contractor must charge GST on their invoices to each sports team they provide contract services.
At first glance GST on medical and health services appears simple, however, advice is often required to determine whether or not the services you are providing as a practitioner are GST Free.
If you would like to find out more about the GST requirements for your medical or health practice then please contact us.