GST for doctors: what is exempt, what is taxable and what to do

What is exempt

Healthcare services, meaning diagnosis, treatment or care, provided by a clinical establishment, an authorised medical practitioner or a paramedic are exempt from GST. For a doctor whose income comes only from such services, the practice generally has no GST to charge.

What can still be taxable

• Sale of medicines, medical devices and consumables by a pharmacy, which are taxable at their respective rates.
• Cosmetic or aesthetic procedures that are not medically necessary.
• Hospital room charges above the threshold set by the government, excluding intensive care units.
• Rent from letting out part of your premises, and other non-healthcare services.
• Services such as consultancy, training or research provided outside patient care.

Do I need to register for GST?

If you supply only exempt healthcare services, you are generally not required to register. If you also make taxable supplies, such as running a pharmacy or renting space, you must check whether your taxable turnover crosses the threshold. See GST registration.

Input tax credit: the catch

GST paid on purchases used for exempt services cannot be claimed as credit. Doctors who buy equipment and consumables therefore bear that GST as a cost. If you run both exempt and taxable activities, credit must be split between them.

What to keep in place

• Separate records for exempt and taxable supplies.
• Clear invoices that describe the service or product.
• A review of purchases to see what credit can and cannot be claimed.
• GST returns, if you are registered, filed on time. See GST return filing.