GST on dental services: what is free, what is not
If your invoice template applies 10% GST to everything by default, it is wrong for most of what you do.
The rule
Under section 38-10 of the GST Act, a supply of a health service is GST-free where it is of a kind specified in the regulations, the supplier is a recognised professional in relation to that service, and the supply would generally be accepted as appropriate treatment for the recipient.
Dental services supplied by a registered dentist satisfy that. An examination, a scale and clean, a restoration, an extraction, a root canal, a crown fitted for a clinical reason — GST-free.
So the ordinary dental invoice carries no GST at all.
What is not GST-free
The exceptions are real but narrower than people expect:
Retail product sold separately. A whitening kit, an electric toothbrush, a mouthguard sold over the counter rather than supplied as part of treatment. This is a sale of goods and it is taxable.
Work that is not appropriate treatment. The statutory test asks whether the supply would generally be accepted as appropriate treatment. Purely cosmetic work with no clinical indication sits outside that. Where the line falls in a given case is a question for your accountant, and the answer sometimes depends on facts that are not on the invoice.
Supplies to somebody other than the patient. Certain reports and records provided to a third party — an insurer, a solicitor — are a different supply from treating the patient, and are generally taxable.
Why this matters for how invoicing is set up
The two facts together — most lines GST-free, a minority taxable — mean tax has to be settable per line, not per invoice.
A patient who has a check-up and buys a whitening kit on the way out should receive one invoice with GST on one line and not the other. A system that applies a single rate to the whole document cannot produce that, and the practice ends up either raising two invoices or applying the wrong treatment to one of the lines.
It also means the sensible default is no GST, with tax added to the handful of lines that need it. Software that defaults to 10% has the polarity backwards for this industry, and every invoice it produces starts wrong.
Two things worth checking today
Pull a recent invoice that mixed treatment and product. Is the GST on the right line only? If your system cannot do that, it is worth knowing before the BAS rather than during it.
Check what your item codes default to. If your catalogue was set up by importing a template from a generic accounting package, the tax rate on every item is likely 10% and nobody has looked since.
This is general information, not tax advice. The GST treatment of a specific supply depends on its facts. Talk to your accountant about your own invoicing, particularly anything involving cosmetic work, where the line is genuinely a matter of judgement.