Goods and Services Tax (GST)
The GST was introduced on 1 July 2000. The following outlines the effects of the GST Legislation on payments made by Medicare Australia and what you may be required to do for those payments.
Generally, payments or services supplied to the public are GST-free. This applies to such things as Medicare benefits, medicines supplied under the Pharmaceutical Benefits Scheme, and the 30% Rebate on Private Health Insurance.
More information about taxes borne by consumers is available from the ATO Tax Reform website.
This section on GST and Medicare Australia payments relates to program and incentive payments made to:
- pharmacies, pharmacists and other approved dispensers
- radio-oncology clinics
- Colostomy and Ileostomy associations, and Paraplegic and Quadriplegic associations
- wholesale medicine suppliers for the Botox and IVF/GIFT programs
- simplified billing agents
- software suppliers
- registered health care providers for the provision of NBCSP information
Although many health services such as Medicare and the Pharmaceutical Benefit Scheme are free from the Goods and Services Tax (GST), the Australian Taxation Office (ATO) has advised us that there are some payments made by Medicare Australia, including some of those paid on behalf of the Department of Veterans' Affairs, where GST should apply. In those circumstances, the payment itself is deemed under GST law to be a 'consideration for a supply' (ie a payment for a service which you are deemed to be rendering to Medicare Australia or the Federal Government).
As a result, Medicare Australia needs to collect some information from you to ensure that you continue to receive Medicare Australia payments in full.
For your enterprise to continue to receive payments in full from Medicare Australia, you must comply with the requirements of the GST Legislation. If you receive or may receive payments from Medicare Australia that are not GST-free you need to give Medicare Australia the Australian Business Number (ABN) of the enterprise, and enter into a Recipient Created Tax Invoice (RCTI) Agreement with Medicare Australia, signed by an appropriate representative of the enterprise. You also need to advise Medicare Australia if you do not have an ABN, or if any of your ABN or Medicare Australia Reference ID details change.
Provide this information to Medicare Australia by completing the appropriate form.
The Australian Taxation Office's official website, containing information on all aspects of tax reform and GST.
- Business Entry Point (BEP) Provides government information on Australian business, and covers taxation issues.
- Department of Health and Ageing Deals with how the GST Legislation affects health and aged care goods and services.
If you need further clarification please call the Medicare Australia's GST hotline on 1800 653 629.
Last updated: 12 August, 2011