ATO ID 2001/493: GST and the supply of a prescription
Date of decision: 11 September 2001
Business line: Indirect Tax

Issue
Is the entity, a medical practitioner, making a GST-free supply under subsection 38-7(1) of the A New tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a prescription for an immunisation medication to a patient?

Decision
Yes, the entity is making a GST-free supply under subsection 38-7(1) of the GST Act when it supplies a prescription for an immunisation medication to a patient and it is evidenced that the supply is generally accepted in the medical profession as being necessary for the appropriate treatment of that patient.

Facts
The entity is a medical practitioner. The entity supplies a prescription for an immunisation medication to a patient. The entity charges a fee for this prescription. The prescription is not provided during a medical consultation. A medicare benefit is not payable for this service. The service is not rendered in prescribed circumstances within the meaning of regulation 14 of the Health Insurance Regulations made under the Health Insurance Act 1973 or for cosmetic reasons. The entity supplies the patient with the prescription and the patient has the prescription filled at the pharmacy. The patient usually returns to the medical practitioner to have the immunisation administered. The entity has assessed the patient during a previous consultation and determined, that the vaccination is for the appropriate treatment of the patient. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: Under subsection 38-7(1) of the GST Act, the supply of a medical service is GST-free. A 'medical service' is defined under section 195-1 of the GST Act to mean: In this case, there is no medicare benefit payable for the service provided by the entity. As such, the service does not fall within the first limb of the definition of a 'medical service' in section 195-1 of the GST Act. Therefore it is necessary to determine whether the entity is making a supply that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply, as per the second limb of the definition of 'medical service' in section 195-1 of the GST Act. It is considered that appropriate treatment is established where a medical practitioner assesses the recipient's state of health and determines a process to pursue in an attempt to preserve, restore or improve the physical or psychological wellbeing of the recipient. Appropriate treatment includes the principles of preventative medicine. The entity has assessed the patient during a previous consultation and determined that the vaccination is for the appropriate treatment of the patient. The medical service is not excluded under subsection 38-7(2) of the GST Act. Therefore, the entity is making a GST-free supply under subsection 38-7(1) of the GST Act when it supplies to a patient a prescription for an immunisation medication and it is evidenced that the supply is generally accepted in the medical profession as being necessary for the appropriate treatment of that patient.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-7(1) subsection 38-7(2) section 195-1
Other references: Health Industry Issues Register issue 1.a.14 and 1.a.18
Subject references: Goods & services tax GST free GST health Medical services