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_JCB7(Newbie)Newbie
1 Feb 2021

I work for a medical practice that has sub-contractors who invoice monthly for their services. I have a couple of questions with regards to GST. Firstly, we do not charge GST to our clients as it's a medical service. The sub-contractor basically gets a percentage for the work they perform for the practice and they invoice the practice at the end of the month.

1. Should the sub-contracting practitioners be charging GST for their service to us?

2. If their invoice includes an additional GST component for the services they provide to the practice do I need to check if they are registered for GST or not via their ABN?

3. Is it "the company's" responsibility to check this before paying their invoice?

4. If a contractor is not registered for GST but is adding GST to their invoice is this incorrect?

Feeling a bit confused with all this and hoping someone can simplify it for me. Thanks.

11,461 views
2 replies
11,461 views
2 replies

Most helpful response

Most helpful replyATO Certified Response

TonyATO(Community Support)Community Support
ATO Certified Response2 Feb 2021

Hello @JCB7


Some great questions. I will do my best to simplify it for you :)


  • Even though the supply from the medical practice to the client/patient will usually be GST-free, the supply by the health practitioner/contractor to the clinic will usually not be GST-free.
  • You can confirm if the contractor is registered for GST by searching for their ABN on the ABN Lookup website.
  • While you are not required to check the ABN Lookup before paying an invoice, it is always good idea to check first to make sure the contractor is not charging GST illegally.
  • If the contractor is not registered for GST, they cannot legally charge GST, therefore you do not need to pay GST on an invoice if the contractor is not registered.


There is more information about this on our website under: arrangements between clinics and health practitioners.


Have a great day :)


ATO

All replies

Most helpful replyATO Certified Response

TonyATO(Community Support)Community Support
ATO Certified Response2 Feb 2021

Hello @JCB7


Some great questions. I will do my best to simplify it for you :)


  • Even though the supply from the medical practice to the client/patient will usually be GST-free, the supply by the health practitioner/contractor to the clinic will usually not be GST-free.
  • You can confirm if the contractor is registered for GST by searching for their ABN on the ABN Lookup website.
  • While you are not required to check the ABN Lookup before paying an invoice, it is always good idea to check first to make sure the contractor is not charging GST illegally.
  • If the contractor is not registered for GST, they cannot legally charge GST, therefore you do not need to pay GST on an invoice if the contractor is not registered.


There is more information about this on our website under: arrangements between clinics and health practitioners.


Have a great day :)


ATO

Salute(Newbie)Newbie
8 Aug 2023

If a business is registered for GST, Can the business claim GST credits for subcontractor payments while subcontractor is not registered for GST?

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