GST and Health Services


  • GST Free medical services
  • Non-medical health services: GST implications
  • Identifying the recipient in health supply for GST determination
  • Goods supplied in GST free health services
  • GST free treatment for services via third-party arrangements
  • GST free treatment for medical aids and appliances
  • GST free treatment for health goods

GST Free medical services

In the Australian GST context, medical services assume a distinct role by being categorized as GST free. You can classify a medical service into two types:

  • firstly, services eligible for a Medicare benefit, and
  • secondly, any service rendered by a medical practitioner or approved pathology practitioner acknowledged by the medical profession as necessary for the recipient’s appropriate treatment.

When the recipient of a medical service isn’t the patient but rather another business or organization, the supply doesn’t meet the criteria for GST free status as a medical service, unless there’s an associated Medicare benefit. The guidelines regarding GST for health services are outlined in the GST Act.

It’s important to recognize that not all medical services fit into the GST free category. Procedures that are primarily cosmetic and lack a corresponding Medicare benefit, such as tattoo removal, fall outside the scope of GST free services.

Services Conducted on Behalf of a Medical Practitioner
When services are carried out on behalf of a medical practitioner, certain conditions come into play to establish this arrangement. These include:

  1. Billing in the Medical Professional’s Name: The service must be invoiced under the medical professional’s name, signifying their direct connection to the service and their ultimate accountability for it.
  2. Full Responsibility Acknowledgment: The medical practitioner needs to accept complete responsibility for the service, signifying their commitment to its quality and outcomes.
  3. Integral to the Professional’s Service: The service should seamlessly integrate with the broader array of services provided by the medical professional, aligning with their expertise and domain.
  4. Medical Professional Involvement: At a minimum, the medical practitioner should be engaged in a part of the specific service, reflecting their direct participation in its execution.

Patient Referrals in Healthcare
When a medical practitioner directs a patient to another professional, like a specialist, it’s important to recognize that the service provided by the second individual operates independently from the referring practitioner’s involvement.

This means that the service offered by the specialist is not conducted as a representative of the referring practitioner and does not constitute a component of the referring practitioner’s overall service.

For taxation purposes, the service provided by the second person—such as the specialist—needs to be evaluated separately to ascertain whether it qualifies for GST free status. This assessment is based on the nature of the service itself and the applicable criteria for GST exemption.

Medical Reports
A medical report supplied by a medical practitioner is exempt from GST if it aligns with one of the following conditions:

  1. Medicare Benefit Association: The report is deemed GST free if a Medicare benefit is applicable to it. This signifies a direct link to the public health insurance system and its provisions.
  2. Intrinsic to GST free Medical Service: The report also qualifies for GST free status when it is an ordinary and natural component of a GST free medical service. This recognizes the essential role that medical reports play within the context of comprehensive medical care.

Medical Reports in Injury Compensation Cases
When utilizing medical reports for litigation involving injuries, it’s important to note that the same prerequisites for GST free designation apply.

These criteria, which determine the appropriate taxation treatment, remain uniform regardless of whether the reports are used for legal proceedings related to injury compensation.

Extending GST free Eligibility to Shared Medical Reports:
In certain situations, the scope of GST free status can include medical reports that are shared with fellow medical practitioners.

Under these circumstances, a medical report sent to another practitioner can potentially meet the criteria for GST free treatment, depending on the specific context and qualifications involved.

A dentist performing dental work on a patient

Non-medical health services: GST implications

As you evaluate whether your health services qualify for GST free status, it’s essential to extend your focus beyond medical offerings. Specific conditions play a crucial role in determining the exemption from GST for these services, as long as particular criteria are met.

  • the health service must be explicitly listed within the designated categories of health services.
  • the service must be carried out by a health professional acknowledged within the specific listed health service area. Under specific circumstances, their assistant may perform the service.
  • the health service should be universally recognized within the relevant health profession as an indispensable component for the appropriate treatment of the recipient.

Keep in mind that the recipient of the health service provided by the health professional might not always be the patient. Depending on the scenario, the recipient could be a different business entity.

Eligible Health Services
For a health service to attain GST free status while not being classified as a medical service, it must fall within the scope of the following categories:

Aboriginal or Torres Strait Islander health service


Audiology or audiometry





Herbal medicine (it includes traditional Chinese herbal medications)



Occupational therapy








Speech pathology

Speech therapy

Social work

It is essential that the service aligns explicitly with one of the listed categories and is not merely similar to any of these disciplines.

Recognized Health Professionals
A recognized health professional is an individual who holds registration, permission, or approval under the regulations of state or territory law to offer the designated health service.

If no pertinent state or territory law exists, recognition is extended to a member of a professional association that:

  • Pertains to the specific designated health service
  • Imposes consistent national registration prerequisites

Massage Therapy: GST Guidelines
The GST status of massage therapy hinges on specific conditions established within the GST Act. Given that massage therapy isn’t explicitly recognized as a designated health service in the Act, providing massage therapy on its own is subject to GST.

However, avenues exist through which you can provide massage therapy as a GST free service:

  • When you incorporate massage therapy as a component of a listed health service, like physiotherapy, you can qualify for GST free provision.
  • GST free status is attainable if you are a recognized professional in a listed health service and hold training in massage therapy.
  • If massage therapy is regarded by the profession of the listed health service as a standard technique or vital treatment element, it can be supplied as GST free.
  • When massage therapy is deemed necessary by the listed health service profession for the recipient’s appropriate treatment, it becomes eligible for GST free provision.
Sitting outside a doctor's office

Identifying the recipient in health supply for GST determination

The recipient of a health supply is the entity or individual who engages a health practitioner to avail of their services.

While patients are the typical recipients, situations may arise where businesses are involved. Notably, when health services are furnished to businesses, they generally don’t fall under GST free provisions.

In instances where patients engage businesses to access health services, the service rendered by that business to the patient can be considered GST free.

This, however, depends on fulfilling the specified criteria for medical services or other health services.

Clinic and Health Practitioner Collaborations
Health practitioners often establish partnerships with clinics to deliver patient care, where the practitioner provides services while the clinic manages administration and facilities. The parties may decide to split patient fees.

The GST outcomes in such collaborations depend on the contracting parties. The contractual agreement dictates the GST consequences, necessitating clear identification of contracting entities.

Scenario 1: Clinic Engages Health Practitioner: When a clinic contracts a health practitioner for patient services, the practitioner’s supply to the clinic is usually not GST free.

On the other hand, if the clinic offers the services of the practitioner to patients, the clinic’s provision to patients can qualify for GST free status, provided it fulfills the requirements for medical services or other health services.

Scenario 2: Health Practitioner Contracts Clinic:
If a health practitioner contracts a clinic for rooms and admin services, the clinic’s supply to the practitioner is not GST free.

In this scenario, the practitioner’s supply to the patient can be GST free, contingent on fulfilling criteria for medical services or other health services.

Appropriate Treatment in the Context of Health Professionals:
The concept of “appropriate treatment” includes the scope and criteria for health professionals to qualify for GST free treatment. This pertains to their practice and the conditions under which their services are exempt from Goods and Services Tax (GST).

Health professionals engage in “appropriate treatment” when they apply their specialized expertise to perform the following actions:

  • Conduct a thorough evaluation of a patient’s health status.
  • Devise a suitable plan of action to preserve, restore, or enhance the patient’s physical or psychological well-being, in accordance with their professional training.
  • Provide a treatment that is widely accepted within their professional domain as being fitting for the patient’s condition.

Appropriate treatment extends to include preventive medicine and routine health assessments.

Examples include procedures like pap smears, breast cancer screening, and vaccinations. These services are considered GST free since they align with the people’s health needs and are deemed suitable within the context of their well-being.

A dentist attending to a patient, representing the concept of GST and health services.

Goods supplied in GST free health services

As you discover the treatment of goods provided within GST free health services, you’re essentially assessing their significance within the treatment framework.

This assessment revolves around determining when a supply of goods can qualify for GST free status, ensuring harmony with the health service context.

To achieve GST free status for the supply of goods, you must fulfill two key conditions concurrently:

  • The goods supplied must play an indispensable role in facilitating the GST free health service.
  • The goods should be handed over at the same time and location as the health service.

Goods Eligible for GST free Supply
The goods in question should satisfy either of these criteria:

  • Tailored for Patient’s Treatment: The goods should be specifically designed to address the patient’s unique illness or disability.
  • Essential for Consultation: The goods must be crucial for treating the patient during that specific consultation.

However, remember that distinct rules come into play for the following scenarios:

  • Optometrists and pharmacists
  • Herbal medicine practitioners (including Chinese herbal medicine practitioners) and naturopaths.

GST free treatment for services via third-party arrangements

Certain third-party transactions can also meet criteria for GST free treatment. In some cases, medical and health services are delivered under multi-party agreements, where a third party coordinates and covers the costs for a patient’s treatment.

Eligible Parties in Third-Party Scenarios
If a service qualifies for GST free status when provided directly to the patient, the same GST free status extends to your contractual interaction with:

  • An insurer
  • An operator of a legal compensation program
  • A compulsory third-party scheme (scheme operator)
  • An Australian Government agency.

However, it’s feasible for both you and the recipient (be it an insurer, scheme operator, or government agency) to decide not to treat these supplies as GST free.

This offers flexibility, especially when parties are dealing with a mix of taxable and GST free supplies.

Remember that medical and health services furnished to third parties outside the specified categories are ineligible for GST free treatment.

When a supply isn’t directed towards a third party (for instance, if a third party pays you as the medical practitioner on behalf of the patient), GST free treatment applies as long as the supply aligns with the definition of a medical or other health service.

Empty beds inside a hospital, representing the concept of GST and health services.

GST free treatment for medical aids and appliances

Take a closer look at the prerequisites that govern the GST free treatment of medical aids and appliances. To meet the criteria for GST free status, medical aids and appliances must satisfy all three of the following conditions:

  • These aids and appliances need to be included in either Schedule 3 to the GST Act or the GST regulations.
  • They must be specifically designed to cater to individuals dealing with an illness or disability.
  • These aids and appliances should not be commonly utilized by individuals without an illness or disability.

Medical aids and appliances meeting these criteria are granted exemption from GST throughout the entire process, covering the journey from production to the end consumer.

Hiring Out Medical Aids and Appliances
When medical aids and appliances meet the criteria for GST free sale, they are also eligible for GST free hire.

For instance, if a chemist rents out a wheelchair to a customer, they won’t impose GST on the rental fee.

GST Treatment for Spare Parts
When you’re dealing with spare parts uniquely crafted for a GST free medical aid or appliance, you’re looking at GST free sales.

However, when it comes to generic parts, they fall under the taxable bracket.

For instance, if you’re selling a replacement wheelchair wheel that comes with a distinct hand grip designed exclusively for the purpose, it qualifies for GST free treatment.

In contrast, generic batteries intended for an electric wheelchair would attract GST since they lack specific design for that wheelchair.

Repairing GST free Medical Aids and Appliances
When you’re repairing a GST free medical aid or appliance using a part that’s specifically designed for it, any accompanying labor or parts not tailored for it are also GST free.

GST comes into play in the following repair contexts for GST free medical aids or appliances:

  • Parts not specially crafted as spare parts for that aid or appliance and not integral to the supply of specific spare parts.
  • Consumables like repair or service oils not incidentally related to specific spare parts.
  • Specifically designed spare parts incidentally associated with the labor component of the repair service (when labor is the primary supply).
  • The labor involved in repairing a medical aid or appliance shouldn’t merely be secondary to providing a specifically designed spare part.

“Incidental” here signifies something integral, supplementary, or inherent to a supply that’s part of another supply without needing distinct GST recognition.

Taxable Treatment for Medical Aids and Appliances
You hold the authority to negotiate with your supplier and decide to treat GST free medical aids and appliances as taxable.

This option becomes valuable, especially when a manufacturer supplies both GST free and taxable medical aids and appliances to a retailer.

This approach simplifies the process of identifying the GST status of each product.

If you, as a purchaser, have GST registration or are required to register for GST, entering into such an agreement might enable you to claim a GST credit for the paid GST.

Interestingly, even with this agreement, you still have the freedom to offer these items to your customers as GST free.

Supplies of Adjustable Beds, Mattresses, and Overlays
Remember that the GST free status of adjustable beds, mattresses, and overlays is applicable when they meet these criteria:

  • Specifically designed for individuals grappling with an illness or disability.
  • Not commonly used by individuals without an illness or disability.
  • Listed in Schedule 3 of the GST Act or GST regulations.

GST free Supply of Wound Care
For wound care products to be GST free, they must fulfill these conditions:

  • Constructed from materials like alginate, hydro colloids, hydro gels, polyurethane film, and polyurethane foam.
  • Tailored to serve individuals specifically coping with an illness or disability.
  • Not widely used by individuals without an illness or disability.

However, if wound care products are extensively used in the broader community by individuals without illnesses or disabilities, they transition into the taxable category. This might encompass items such as plasters utilized to cover blisters, corns, and calluses.

It is noteworthy that bandages and dressings supplied as part of a GST free medical service retain their GST free status.

GST Treatment for COVID-19 Medical Aids and Appliances
You can find GST free status for medical aids and appliances used in COVID-19 treatment when they meet particular conditions, which involve being listed in Schedule 3 of the GST Act or GST regulations.

Importantly, GST does not apply to the following product categories:

  • Cardiovascular appliances
  • Diabetes and dialysis medical aids and appliances
  • Ventilators
  • Other respiratory appliances like peak flow meters.

Conversely, items not featured in Schedule 3 of the GST Act or GST regulations fall under GST applicability. This group encompasses products like:

  • Rapid antigen COVID test kits
  • Hand sanitiser
  • Personal protective equipment (PPE), including disposable items like face masks, gowns, gloves, and protective eye wear like goggles, glasses, or visors.
The lobby of a hospital

GST free treatment for health goods

Sales of the following goods are GST free:

  • Maternity pads
  • Menstrual cups
  • Menstrual pads and liners
  • Menstrual underwear
  • Tampons
  • Other similar products designed specifically for absorbing or collecting lochia, menses, or vaginal discharge.

Additional Conditions for GST free Health Goods
You’ll find sales of the following goods qualifying for GST free status if they are either required to be listed in the Australian Register of Therapeutic Goods or belong to a category of goods mandated to be included in the Australian Register of Therapeutic Goods:

  • Condoms
  • Barrier dams, femidoms, and harness devices
  • Water-soluble personal and surgical lubricants compatible with condom use
  • Preparations containing folic acid as a single active ingredient, with a recommended daily dose of 400 to 500 micrograms, intended for human use
  • Sunscreen preparations for dermal application marketed primarily as sunscreen, boasting a sun protection factor rating of 15 or more
  • Nicotine formulated as an aid for withdrawal from tobacco smoking, administered through transdermal or mucosal use.

Thus, with the understanding of these conditions you can fully prepare to accurately assess the GST free eligibility of health goods, ensuring seamless adherence to relevant regulations.

This article is general information only and does not provide advice to address your personal circumstances. To make an informed decision you should contact an appropriately qualified professional.