Issue
Is the entity, a supplier of hospital care services, making a GST-free supply under subsection 38-20(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies hospital care services to a patient recovering from general medical conditions?
Decision
Yes, the entity is making a GST-free supply under subsection 38-20(1) of the GST Act, when it supplies hospital care services to a patient recovering from general medical conditions.
Facts
The entity is a registered private hospital. The entity is providing hospital care to patients recuperating from general medical conditions. The hospital care supplied involves accommodation and nursing services.
The hospital care is not related to a supply of a professional service that is not GST-free because of subsection 38-7(2) of the GST Act
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under subsection 38-20(1) of the GST Act, a supply of hospital treatment is GST-free.
'Hospital treatment' is defined in section 195-1 of the GST Act as having the meaning given by subsection 67(4) of the National Health Act 1953. 'Hospital treatment' is defined in subsection 67(4) of the National Health Act to mean: accommodation and nursing care, whether provided for the purpose of permitting the provision of professional attention or, in the case of a nursing-home type patient, as an end in itself, and includes: (a) the provision at, or on behalf of, a hospital of relevant health services to a patient of the hospital; and (b) the provision at a hospital of a facility for a patient of the hospital; and (c) a prosthesis provided as part of an episode of hospital treatment.
Accordingly, 'hospital treatment' covers supplies of accommodation and nursing services made by the entity to its patients.
However, subsection 38-20(2) of the GST Act provides that a supply of hospital treatment is not GST-free to the extent that it relates to a supply of a professional service that, because of subsection 38-7(2) of the GST Act, is not GST-free.
In this case subsection 38-20(2) of the GST Act does not apply as the services that the entity provides do not relate to a supply of a professional service that is not GST-free because of subsection 38-7(2).
Therefore, the entity is making a GST-free supply of hospital treatment under subsection 38-20(1) of the GST Act.