• Issue 1. Section 38-45 Medical aids and appliances

    Non-interpretative – straight application of the law.

    Explanation

    Section 38-45 provides that where the elements of that section are satisfied, a medical aid or appliance listed in Schedule 3 or specified in the regulations is GST-free. The elements of subsection 38-45(1) require that the medical aid or appliance be:

    1. covered by Schedule 3 or a subsequent regulation; and
    2. specifically designed for people with an illness or disability; and
    3. not widely used by people without an illness or disability.

    Once an item meets all of the above elements then its supply will be GST-free all the way down the supply chain and not only when supplied to a person who has an illness or disability. One exception to this applies and that is when the supplier and the recipient agree to treat the supply as if it were taxable pursuant to subsection 38-45(3).

    Further, subsection 38-45(2) provides that a spare part that is specifically designed as a spare part for a GST-free medical aid or appliance will be GST-free.

    Related questions - The following questions explore what is within the concept of 'medical aid and appliance' for the purposes of section 38-45. None of the questions and answers should be read in isolation but rather as part of the whole of the information contained in this document.

    (a) added, (u) updated, (w) withdrawn

    Date Issue

    26/02/01

    1.a. What descriptions of goods has the ATO determined for the medical aids and appliances listed in the third column of Schedule 3 of the GST Act?

    26/02/01

    1.b. What goods have been added by regulation for the purposes of subsection 38-45(1)?

    26/02/01

    1.c. What factors should be taken into account in determining whether a medical aid or appliance is specifically designed for people with an illness or disability?

    26/02/01

    1.d. What factors should be taken into account in determining whether a medical aid or appliance is widely used by people without an illness or disability?

    26/02/01

    1.e. Subsection 38-45(1) provides that for a medical aid and appliance listed in Schedule 3 to be GST-free, it must be specifically designed for and not widely used by people without an illness or disability. Are aged persons included in ' people with an illness or disability' for the purposes of section 38-45?

    26/02/01

    1.f. Are supplies of medical aids and appliances only GST-free when supplied to the person with an illness or disability?

    26/02/01

    1.g. What is a spare part for the purposes of subsection 38-45(2)? Are supplies of spare parts for GST-free medical aids and appliances only GST-free when supplied to the person with an illness or disability?

    26/02/01

    1.h. Are leads and attachments supplied with an item covered by Schedule 3 (such as electrodes supplied with a Transcutaneous Electrical Nerve Stimulator (TENS) machine) GST-free?

    26/02/01

    1.i. Is the hire of goods GST-free where those same goods would be GST-free under section 38-45 if purchased?

    26/02/01

    1.j. Where a person hires or purchases goods through a hospital which are not listed in Schedule 3 or specified in the regulations, will the goods be GST-free?

    26/02/01

    1.k. Are there items of suppositories which:

    (i) will not qualify for GST-free (supply chain) status under Schedule 3; but
    (ii) will qualify for GST-free (non supply chain) status under any of sub-sections 38-50(1), (2), (4) or (5)?
     

    26/02/01

    1.l. Is each supplier in the supply chain responsible for determining the GST treatment of a supply or does that responsibility rest with say the manufacturer?

    26/02/01

    1.m. What meaning does the category heading in the second column in Schedule 3 of the GST Act have?

    24/05/01 (a)

    1.n. Are walking sticks GST-free?

    24/05/01 (w)

    What are the arrangements for subsequent reviews of Schedule 3?

      Last modified: 02 Apr 2014QC 16333