Medical centres provide GST refunds to patients

Four medical centres in Queensland have offered to provide refunds and will apologise to any patients who were charged GST in relation to hepatitis B vaccinations of children when they shouldn't have been. The medical centres, located in Townsville, Cairns, Indooroopilly and Upper Mt Gravatt trade under the Aus-Care group name.

The offer of refunds follows a complaint made to the Australian Competition and Consumer Commission's North Queensland office advising that a medical centre in Townsville had charged GST on vaccinations for the Hepatitis B virus for children under the age of thirteen years. Investigations by the ACCC indicated that similar charges may have been made by the other three medical centres.

'After considering information published by the Australian Tax Office, the ACCC formed the view that the medical centres had included a GST component on goods or services which were GST-free and as such, the medical centres were at risk of breaching the price exploitation provisions of the Trade Practices Act', Acting ACCC Chairman, Mr Allan Asher, said today.

'The medical centres now agree that in most circumstances, the vaccinations in question should be GST-free. They admitted that in charging GST they may have inadvertently misled their patients and charged more than they should have'.

After being approached by the ACCC, the medical centres cooperated with efforts to ensure the vaccinations did not include a GST component and have agreed to fix the problem by providing the ACCC with court-enforceable undertakings.

'This is a good outcome for patients of the medical centres because they will be compensated for any over-charging they were subject to in vaccinating their children', Mr Asher said.

'It also demonstrates that the ACCC has a presence across regional Australia and has the ability to get results wherever consumer protection issues arise'.

The medical centres will also take the positive approach of conducting a review of all their billing practices to ensure that there is no GST component on any GST-free services.

The undertakings also include an agreement to institute a trade practices compliance program to ensure that future conduct of the medical centres is less likely to raise concerns under the Act.

'The ACCC encourages other medical practitioners to take the same steps as these medical centres by reviewing the publicly available information from the Australian Taxation Office and ensuring that there is no GST component on any GST-free medical services.

'However, where businesses wait to be approached by the ACCC or do not rectify a situation quickly, the ACCC will not hesitate to take whatever action is necessary to ensure that consumers obtain refunds'.

Consumers, businesses and professionals can get information about the ACCC's price exploitation guidelines from the ACCC's website at http://gst.accc.gov.au. Information concerning the supply of medical services and the GST can also be found at the Australian Taxation Office tax reform website at http://www.taxreform.ato.gov.au/.

Background

Section 38-7 of the New Tax System (Goods and Services) Act 1999 ('the GST Act') provides:-

(1) A supply of a *medical service is GST-free.

(2) However, a supply of a *medical service is not GST-free under subsection (1) if:

(a) it is a supply of a *professional service rendered in prescribed circumstances within the meaning of regulation 14 of the Health Insurance Regulations made under the Health Insurance Act 1973 (other than the prescribed circumstances set out in regulations 14(2)(ea), (f) and (g)); or

(b) it is rendered for cosmetic reasons and is not a *professional service for which medicare benefit is payable under Part II of the Health Insurance Act 1973.

Section 195-1 of the GST Act defines a medical service as :

a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973;

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.

According to Information made available to the public and the medical profession on the Australian Taxation Office tax reform website, appropriate treatment includes the principles of preventative medicine and immunisations would fall within the definition of medical services under the GST Act.