GST and the supply of a repeat prescription

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 repeat prescription to a patient?

Yes, the entity is making a GST-free supply under subsection 38-7(1) of the GST Act where it supplies a repeat prescription 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.

The entity is a medical practitioner. The entity supplies a repeat prescription to a patient. The entity charges a fee for this repeat 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.

In this case, the entity has previously prescribed this particular drug to the patient. The entity has assessed the patient and determined that the repeat prescription is necessary for the ongoing treatment of the patient.

The entity is registered for goods and services tax (GST).

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: • a service for which a 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.

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 '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 previously assessed the patient and determined that the repeat prescription is necessary for the ongoing 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 a repeat prescription 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.