2.b.3. A recognised professional fits a patient with an appliance for the purpose of correcting an illness or disability. Will these goods supplied at that time be GST-free?
For source of ATO view, refer to issues 1.c together with 2.a of this issues register.
This question requires the consideration of sections 38-45 and 38-10 and focuses upon the supply of goods.
The goods may be GST-free pursuant to section 38-45 if they are:
- a medical aid or appliance covered by Schedule 3 or subsequent regulation, and
- the medical aid or appliance is specifically designed for people with an illness or disability, and
- the medical aid or appliance is not widely used by people without an illness or disability.
Once an item meets all of the above criteria its supply will be GST-free. The GST-free status will apply all the way down the supply chain and not only when supplied to a person who has an illness or disability. The elements do not require the recipient of the aid or appliance to use it in a particular way. An example of medical aids and appliances that are contained in Schedule 3 are heart monitors and pacemakers (Items 1 and 2 of Schedule 3).
If section 38-45 does not apply to the goods it is necessary to consider the application of section 38-10(3) which may allow the goods to be GST-free if they are supplied at the premises at which the identified GST-free other health service is supplied by a *recognised professional. Additionally, the goods must be supplied at the same point in time at which the GST-free other health service is supplied and the goods must have been either:
- customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free ‘other health service’, or
- necessarily utilised as an integral part of the patient’s treatment required immediately during that specific consultation.