GST and supply of bandages during a GST-free physiotherapy service

Is the entity, a registered physiotherapist, making a GST-free supply under subsection 38-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a bandage that is applied to a patient during the provision of a GST-free physiotherapy service?

Yes, the entity is making a GST-free supply under subsection 38-10(3) of the GST Act, when it supplies a bandage that is applied to a patient during the provision of a GST-free physiotherapy service.

The entity is a physiotherapist who is registered under a relevant State Act. The entity supplies a physiotherapy service that is GST-free under subsection 38-10(1) of the GST Act.

During the GST-free physiotherapy service, the entity also supplies the patient with a bandage that is applied to that patient during the consultation. The supply and application of the bandage is an integral part of the patient's treatment required immediately during that specific consultation.

The supply of the bandage is not GST-free under subsection 38-45(1) of the GST Act.

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

Subsection 38-10(3) of the GST Act provides that a supply of goods is GST-free if: • it is made to a person in the course of supplying to the person a service which is GST-free under subsection 38-10(1) of the GST Act (other than supplies of herbal medicine, naturopathy, optometry and pharmacy); and • it is made at the premises at which the service is supplied.

In this case, the supply of the bandage is made at the premises at which the GST-free physiotherapy service is supplied. This is because it is supplied and applied to the patient during the provision of GST-free physiotherapy consultation. Therefore, it must be determined whether the bandage is supplied in the course of supplying the GST-free physiotherapy service.

It is considered that for goods to be supplied 'in the course of supplying' a GST-free service to a person, in the context of subsection 38-10(3) of the GST Act, the goods must be supplied at the same point in time at which the GST-free physiotherapy services are supplied.

In addition, the goods must be: • customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free physiotherapy service; or • necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.

In this case, the bandage is supplied to the patient at the same point in time at which the GST-free physiotherapy service is supplied. It is necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation. Therefore, the supply of the bandage is made 'in the course of supplying' the GST-free physiotherapy service.

Accordingly, the entity is making a GST-free supply under subsection 38-10(3) of the GST Act when it supplies a bandage that is applied to a patient during the provision of a GST-free physiotherapy service.