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08 Jun 11 GST and certain supplies to health insurers

On 7 June 2011 the Treasury released a consultation paper, entitled “GST and Certain Supplies to Health Insurers”, on the detailed design of a measure to amend the GST law retrospectively to ensure that certain supplies to health insurers are GST-free.

In the 2011-12 Budget the Government announced that it will amend the GST law to ensure that certain supplies made to health insurers in the course of settling health insurance claims will be GST-free with effect from 1 July 2000.

To give effect to this decision it is proposed to amend Subdivision 38-B of the GST Act to make certain supplies from an entity to a health insurer GST free. The supply will be GST-free provided that:

  • the supply to the health insurer is the service of making a supply to an individual, where the underlying supply made to the individual is GST-free under Subdivision 38-B, and
  • the supply to the health insurer is in the course of the settlement of an insurance claim between that individual and the health insurer.

The closing date for submissions is Wednesday, 6 July 2011.