Issue
Is the entity, a laser safety officer, making a GST-free supply under Subdivision 38-B of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it maintains, repairs and calibrates laser surgery equipment for a hospital?
Decision
No, the entity is not making a GST-free supply under Subdivision 38-B of the GST Act when it maintains, repairs and calibrates laser surgery equipment for a hospital. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a laser safety officer. The entity is engaged by a hospital to maintain, repair and calibrate its laser surgical equipment. There is no medicare benefit payable for this service.
The entity is registered for goods and services tax (GST). The supply of the entity's services to the hospital satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Subdivision 38-B of the GST Act sets out the requirements for various supplies relating to the health industry to be GST-free. Of the provisions contained in subdivision 38-B of the GST Act, only subsection 38-7(1) of the GST Act and subsection 38-10(1) of the GST Act are relevant to this situation.
Under subsection 38-7(1) of the GST Act, the supply of a medical service is GST-free.
A '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
The service of calibrating, maintaining and repairing the laser surgery equipment is not a service for which a medicare benefit is payable, nor is the service provided by or on behalf of a medical practitioner or approved pathology practitioner. As such, the supply is not a GST-free supply under subsection 38-7(1) of the GST Act.
Under subsection 38-10(1) of the GST Act, the supply of other health services is GST-free if: (a) the service is of a kind specified in the table in subsection 38-10(1) of the GST Act or of a kind specified in the regulations; and (b) the supplier is a recognised professional in relation to the supply of services of that kind; and (c) the supply would generally be accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the recipient of the supply.
Where all of the above requirements are satisfied, the supply of the health service will be GST-free.
For the purposes of paragraph 38-10 (1)(a) of the GST Act, the service must be of a kind specified in either the table in the subsection or in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).
[Note: No services for subsection 38-10(1) of the GST Act are currently specified in the GST Regulations].
The service of calibrating, maintaining and repairing the laser surgery equipment is not specified in the table in subsection 38-10(1) of the GST Act.
As such, the entity is not making a GST-free supply under subsection 38-10(1) when it calibrates, repairs and maintains laser surgery equipment for a hospital.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it maintains, repairs and calibrates laser surgery equipment for a hospital.