A hospital wants to retain the services of a medical specialist to treat patients by paying the medical specialist a stipend to keep the medial specialist close to the hospital in order to be available on an on-call basis. Does the GST/HST apply to the “on-call” payment made by the hospital to the medical specialist?
In finding that the on-call fee was not exempted under s. 5 of Part II of Sched. V, and was subject to GST/HST, CRA stated:
… The consideration paid or payable must be directly linked to a supply of a health care service that is in fact rendered by a physician to a particular individual. …
… [T]he hospital acquired a right to call upon the physician to attend the hospital during a given time period. This right has a distinct utility to the hospital and as such…the right is a discrete supply that is separate from any health care services that may be rendered by the physician to patients of the hospital.
…For purposes of the GST/HST, “property” is defined in subsection 123(1) to mean any property, … and includes a right or interest of any kind …. As consideration for a supply of “property”, the hospital on-call fee is not consideration paid or payable for a supply of a service for GST/HST purposes. …
CRA went on to note:
If a physician’s only taxable income is generated from hospital on-call fees and these fees do not exceed the small supplier threshold, the physician would qualify as a small supplier and as such not be required to register and charge GST/HST on this fee.