Show download pdf controls

    Medical aids and appliances

    Medical aids and appliances are GST-free if they meet certain conditions.

    On this page:

    Conditions to be GST-free

    The sale of medical aids and appliances is GST-free if they meet all three of the following conditions:

    • listed in schedule 3 to the GST Act or in the GST regulations
    • specifically designed for people with an illness or disability
    • not widely used by people without an illness or a disability.

    Medical aids and appliances that satisfy all these conditions are GST-free at every point in the supply chain – from manufacturer to consumer.

    See also:

    Hiring medical aids and appliances

    If medical aids and appliances meet the conditions to be sold GST-free, they can also be hired out GST-free.

    For example, when a chemist hires a wheelchair out to a customer, they do not include GST in the rental fee.

    Spare parts

    Spare parts that are specifically designed for a GST-free medical aid or appliance are sold GST-free. However, generic parts are taxable.

    For example, a replacement wheelchair wheel that is designed with a specific hand grip is not a generic part and is sold GST-free. However, generic batteries sold for an electric wheelchair are taxable because they are not specifically designed for the wheelchair.

    Repairs to GST-free medical aids and appliances

    If a GST-free medical aid or appliance is repaired using a part that is specifically designed for it, any incidental labour or incidental parts that are not specifically designed for it are also GST-free.

    GST applies to the following parts or labour used to repair GST-free medical aids or appliances:

    • parts that are not specifically designed as spare parts for that medical aid or appliance and which are not incidental to the supply of specifically designed spare parts  
    • consumables, such as oil used in the repair or service that are not incidental to the supply of specifically designed spare parts  
    • specifically designed spare parts that are incidental to the supply of the labour component of the repair service (that is, where the main supply is labour)  
    • the labour component of the repair service where it is not merely incidental to the supply of a specifically designed spare part.

    Incidental refers to something that is integral, ancillary or incidental to a supply that is part of a supply that does not need to be separately recognised for GST purposes.

    Example: Incidental labour and consumables

    Jeff owns a wheelchair and requires a new wheel with a hand grip. Acme Appliance Repair fits a new wheel to Jeff's wheelchair and charges $80 for the wheel. The wheel is specifically designed for use with wheelchairs. They also charge a fitting fee of $5 and charge $2 for oiling the axle.

    The labour for fitting is incidental to supply of the wheel. The fee for oiling the axle is also merely incidental to the supply of the wheel. As the wheel is a GST-free spare part the fitting and oiling are also GST-free.

    End of example

    Treating medical aids and appliances as taxable

    Under GST law, a purchaser can make an agreement with their supplier to treat GST-free medical aids and appliances as taxable. This may happen where a manufacturer supplies a range of GST-free and taxable medical aids and appliances to a retailer and they don't want to identify the GST status of every product.

    Where a purchaser makes such an agreement if they are registered or required to be registered for GST they may be eligible to claim a GST credit for the GST paid.

    The purchaser may still sell these items GST-free to their customers.

    Medical aids and appliances not listed in the GST Act or regulations

    A medical aid or appliance can only be GST-free if it is listed in schedule 3 to the GST Act or the GST regulations. The ATO cannot treat a medical aid or appliance as GST-free and cannot give a ruling that a medical aid or appliance as GST-free, if it is not listed in schedule 3 to the GST Act or the GST regulations.

    Only the Australian Government – and not the ATO – can add new medical aids and appliances to schedule 3 to the GST Act or the GST regulations.

      Last modified: 01 Apr 2019QC 16263