GST answers
One invoice, GST free and taxable lines
Yes. One invoice can carry a GST free consult line and a taxable line beside it, because the tax type is set on each line rather than taken from the invoice. A report, a product the patient takes home, or a training session is a separate supply, tested on its own. Show which lines are taxable, and post each to its own revenue account.
Key facts
- The standing rule
- A tax type is set on each revenue row on its own, so a line does not take its treatment from the line above it or from the invoice it sits on5
- What makes the consult line GST free
- A listed health service, performed by a recognised health professional in that listed service, and generally accepted in that profession as necessary for the appropriate treatment of the recipient of the supply1
- When a medical report is GST free
- Only where a Medicare benefit is payable for the report, or the report is an ordinary and natural part of the performance of the GST free medical service2
- The ATO's worked example on reports
- A progress report an insurer asks for is not GST free: no Medicare benefit is payable, the insurer is the recipient, and the report is not a natural part of the treatment2
- When goods on the same invoice are GST free
- Where they are both a necessary part of providing the GST free health service and supplied at the same time and place as it, and are specific to treating that patient or essential during that consultation3
- The ATO's worked example on goods
- A bandage applied during a GST free consultation is GST free, and extra bandages, dressings and antiseptics the patient takes home are not3
- A referral is not the same supply
- Where a medical practitioner refers a patient to someone else, the second service must be considered separately to work out whether it is GST free2
- The private rows in the allied health template
- One GST free default account for consults, and four categories with a taxable row of their own: reports, supervision, training and products5
Nothing on an invoice inherits a tax type
One invoice can carry a GST free line and a taxable line, and in an allied health practice it often has to. The rule that makes it work is that GST attaches to a supply rather than to a document. Each line is a supply, each supply is tested on its own facts, and a line does not take its treatment from the line above it or from the funder the invoice is addressed to.
The ATO applies the same logic when it separates one practitioner's work from another's. Where a medical practitioner refers a patient on, the second service is not part of the first practitioner's supply, and the ATO says it must be considered separately to work out if it is GST free. A report and a consult delivered by the same practitioner on the same day sit the same way: two supplies, two tests, one invoice.
So the practical question is not what code the invoice takes. It is which lines are on it.
Where the two rates meet in one practice
A mixed invoice is not an edge case. It shows up wherever a practice sells anything alongside treatment, and the canonical templates carry a row for each of those items. The private patient funding source in the allied health template is the clearest case: one GST free default for consults, and four categories that override it.
| What was billed | Revenue account | Xero tax rate |
|---|---|---|
| Anything with no row of its own | 400 Clinical services, private patients | GST Free Income |
| Reports | 420 Reports, assessments and medico-legal | GST on Income |
| Supervision | 421 Supervision, training and workshops | GST on Income |
| Training | 421 Supervision, training and workshops | GST on Income |
| Products | 422 Products and equipment sales | GST on Income |
The same shape repeats under WorkCover in that template: the consult posts to its own GST free account, and a report on the claim posts to account 420 at GST on Income. The other two templates carry no WorkCover report row, so a report there falls through and lands at GST Free Income. Under its own plan managed default the NDIS template gives taxable rows to reports, training, non listed supports and non listed group programs. Listed group programs keep a GST free account, and travel a GST free row overridden per item where its support is taxable.
What makes the consult line GST free
The GST free half of the invoice rests on three conditions, and all three have to hold. The ATO states them for health services that are not medical services, where most allied health work sits.
- It is a listed health service. The list names twenty one services, including psychology, physiotherapy, occupational therapy, speech pathology, podiatry and social work.
- The service is performed by a recognised health professional in that listed service, or in certain circumstances by their assistant.
- The service is generally accepted in that listed health profession as being necessary for the appropriate treatment of the recipient of the supply.
- The ATO adds that the recipient of the supply will not always be the patient, and in some cases may be another business, which is worth checking before the first three matter.
The service has to be one of the listed services rather than similar to one. The ATO's own example is a remedial massage therapist whose work may resemble physiotherapy: remedial massage is not physiotherapy, so it is not a listed service.
The report line is tested on its own
A report is the most common taxable line to appear beside a GST free consult, and it has its own test. The ATO states that test for a medical report: it is GST free only where a Medicare benefit is payable for it, or where it is an ordinary and natural part of the performance of the GST free medical service. Neither limb is about who paid for the treatment.
A report can still be GST free. In the ATO's other example a patient engages a pathologist directly, so the patient is the recipient and the written conclusions are a natural part of the GST free service. What separates the two examples is who asked for the report and why.
The product line depends on where it is used
Goods sold beside treatment have a separate test again. A supply of goods is GST free where it is both a necessary part of providing the GST free health service and supplied at the same time and place as the service, and the goods must be either specific to treating that patient's illness or disability, or essential for treating that patient during that particular consultation.
The ATO draws the line inside one appointment. A bandage applied during a GST free consultation is GST free. Extra bandages, dressings and antiseptics the patient takes home are not. So a strapping tape used in the room and a roll of the same tape sold at reception are two different supplies, and a practice that codes them together is coding one of them wrong.
Different rules apply again for optometrists, pharmacists, herbal medicine practitioners and naturopaths, and separate provisions cover medical aids and appliances. The allied health and psychology templates give products a taxable row of their own. The NDIS plan managed template carries no private product row, so a product line there falls back to the funder default at GST Free Income.
What the canonical templates post
The templates encode the same rule the ATO applies: one posting per funding source, and a category with a row of its own overrides it. That is why the treatment card below shows the categories that take a different posting rather than a single answer for the funder.
All three templates post a private consult the same way, and all three carry taxable rows underneath it. The allied health template overrides the default for reports, supervision, training and products; the psychology template does the same; the NDIS plan managed template carries reports and training. A practice on any of them can raise a mixed invoice on day one without changing its map.
Showing which lines are taxable
There is a document side to this as well as a ledger side. The ATO's tax invoice rules are reported to require that an invoice carrying both taxable and non taxable items clearly shows which items are taxable. That page refused an automated fetch on 3 Sep 2026, so it is carried here as unverified and no fact on this page rests on it. Check the current wording before changing an invoice template.
The practical version is the answer bookkeepers give each other in software community threads: stop looking for one code that covers the invoice, and split the lines, one line per tax rate. Accounting packages set the rate per line, so a mixed invoice is an ordinary document.
- Give each item its own line, described so a reader can tell a consult from a report from a product.
- Set the tax rate on the line, not on the invoice, and let the totals fall out of the lines.
- Point each line at the revenue account that matches its treatment, so the trial balance separates GST free income from taxable income.
- Keep the same split in the practice management system, because that is where the line is created.
What a mixed invoice does to the activity statement
The two lines land in different places on the same activity statement, which is why the split matters beyond tidiness. GST free income is reported at G1 total sales and adds nothing at 1A. Taxable income is reported at G1 and carries GST at 1A.
Getting a line wrong has a cash cost rather than a paperwork cost. GST free treatment coded as taxable means the practice remits one eleventh of revenue that carried no GST, and getting it back needs an amended activity statement. Taxable revenue coded GST free means GST is underpaid, and the shortfall is generally not recoverable from the payer once the invoice is out.
The four ways a mixed invoice gets coded wrong
Each comes from treating the invoice, the funder or the practitioner as the thing that carries the tax type.
- The whole invoice coded GST free because the practice is a health practice. The report and product lines are then understated at G1 and carry no GST at 1A.
- The whole invoice coded taxable because one line on it was. Consult revenue that carried no GST is taxed anyway, which costs real money every quarter until someone notices.
- The report line coded from the funder rather than from the item, so a report on a GST free claim inherits the consult's rate. An item with a row of its own outranks the funder's row and carries both the account and the rate.
- Taxable items posted to the clinical revenue account. The rate can be right and the profit and loss still cannot show which part of the income was taxable.
What Ledger Map does with it
Ledger Map holds one standing map for the practice, approved by the practice before anything syncs. Each invoice line resolves through that map on its own: the funding source picks the row, and a service category with a row of its own outranks it and carries its own account and tax rate. A line the map cannot resolve becomes a question with the options laid out, rather than a silent posting at the invoice's rate.
Nothing here is a treatment Ledger Map chose. The accounts, the rates and the reasons come from the canonical template the practice starts from. On the settlement side, each funder deposit posts as one balanced document set against a clearing account, which sits at BAS excluded in every canonical template because moving a settlement is not a second sale, and leaves one exact match in the bank feed. See how it works for the approval step, or the GST answers index for the item questions this page only touches.
Questions
Can one invoice have both GST free and taxable items?
Yes. GST attaches to each supply rather than to the document, so a consult line can be GST free while a report or product line on the same invoice carries GST. Set the tax rate on each line, and point each line at the revenue account that matches its treatment so the two are separable afterwards.
Can you issue an invoice without GST?
Yes, where none of the lines is a taxable supply. A practice whose sessions are all GST free issues invoices with no GST on them, and the invoice still needs to meet the ATO's invoice requirements. The moment one line is taxable, that line carries GST and the invoice separates it from the GST free lines.
What is the difference between GST free and BAS excluded?
GST free income is a supply with no GST on it, and it is reported at G1 total sales on the activity statement. BAS excluded is used where there is no supply to report at all, such as a movement between the practice's own accounts. Coding revenue BAS excluded understates total sales even though the GST payable comes out the same.
Is a report to an insurer GST free if the treatment was?
Not usually. The ATO's test for a medical report is that it is GST free only where a Medicare benefit is payable for it or it is an ordinary and natural part of the GST free medical service. Its worked example is a progress report an insurer asks for, and that report is not GST free even though the treatment behind it was.
Are products I sell in the clinic GST free?
Only where the goods are a necessary part of providing the GST free service and supplied at the same time and place, and are specific to treating that patient or essential during that consultation. The ATO's example is a bandage applied in the room, which is GST free, against extra bandages the patient takes home, which are not.
Do quotes need to include GST?
A quote is not a tax invoice, so the invoice rules do not apply to it. The useful practice is to quote the same way you will invoice, with the taxable lines shown separately, so the patient is not surprised by a total that moves when the invoice arrives.
Read next
- GST answersGST on reports to WorkCover and insurers
- GST answersGST on products sold to patients
- GST answersGST on cancellation and no-show fees
- GST answersGST on contractor practitioner invoices
- GST answersGST Free Income or BAS Excluded in Xero
- Practice systemsCliniko Xero integration: what syncs, what does not
- HubGST answers
Sources
Open questions
- ato.gov.au refuses automated fetches. The four ATO pages cited here were read in full on 3 Sep 2026 from copies captured through a signed in browser session, and each carries its own last updated date of 12 June 2024.
- The ATO tax invoices page, the top organic result for this question, returned HTTP 403 on 3 Sep 2026 and no signed in copy was captured. The requirement to show which items are taxable is therefore cited as unverified, kept out of the key facts, and worth checking on the ATO site before an invoice template is changed.
- The ATO states the report test on its medical services page, for a medical report supplied by a medical practitioner as part of a GST free medical service. The other health services page states no equivalent test for an allied health report. Applying the same two limbs to a physiotherapy or psychology report is the reading the corpus research and the canonical templates take, and it is not a reading the cached ATO text states in those words.
- Whether supervision of another practitioner is taxable is not settled by the research behind the canonical templates: one Australian accounting source treats it as taxable and an ATO interpretative decision points the other way on one fact pattern. The allied health and psychology templates post it taxable and this page reports that as what those templates do, without settling it. The NDIS plan managed template carries no private supervision row, so it falls back to the funder default at GST Free Income.
- Products are the least settled line on a mixed invoice. The allied health and psychology templates give them a taxable row and leave an item level override for medical aids and appliances, which have their own provisions this page does not attempt to list. The NDIS plan managed template carries no private product row, so a product line there falls back to the funder default until a practice adds one.
- The activity statement labels on this page follow the corpus research at docs/research/domain-mechanics.md section 3.6, which covers G1 and 1A on Simpler BAS. No ATO activity statement page was readable on 3 Sep 2026, so those labels rest on the corpus rather than on a quoted ATO page.
- Xero Central's rates article body did not load on 3 Sep 2026, so the Xero rate names on this page come from the canonical templates rather than from a quoted Xero article.
- Whether a practice can recover GST it did not charge on a taxable line after the invoice has gone out depends on its agreement with the payer, and was not researched here.
- The practitioner threads behind the practical answer were read as search result listings rather than as thread pages, so no poster is quoted and no thread is cited.
- Other health services, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
- Medical services, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
- Goods supplied as part of a GST free health service, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
- Recipient of the supply, GST and health
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
Review
Last reviewed 3 Sep 2026 by Shane
General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.
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