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ATO Interpretative Decision

ATO ID 2001/211 (Withdrawn)

Goods and Services Tax

GST and hearing aid components
FOI status: may be released
  • This GST ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decision
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, a supplier of medical aids and appliances, making a GST-free supply under subsection 38-45(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a component part for a hearing aid?

Decision

No, the entity is not making a GST-free supply under subsection 38-45(2) of the GST Act when it supplies a component part for a hearing aid. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a supplier of medical aids and appliances. The entity is supplying a component part for a hearing aid. The supply of the hearing aid is GST-free under subsection 38-45(1) of the GST Act.

This component part is supplied as a spare part for a hearing aid but is not specifically designed as a spare part for a hearing aid.

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Reasons For Decision

Subsection 38-45(2) of the GST Act provides that a supply of a spare part is GST-free if it is 'supplied as a spare part' for a GST-free medical aid or appliance; and it is 'specifically designed as a spare part' for a GST-free medical aid or appliance.

In this case, although the component part is supplied as a spare part for a hearing aid that is a GST-free medical aid or appliance (under subsection 38-45(1) of the GST Act); it is not specifically designed as a spare part for the hearing aid. As such, the entity is not making a GST-free supply of a spare part under subsection 38-45(2) of the GST Act.

The entity is registered for GST and the supply meets the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.

Date of decision:  12 October 2000

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   subsection 38-45(1)
   subsection 38-45(2)
   Division 40

Related ATO Interpretative Decisions
ATO ID 2001/210
ATO ID 2001/212

Keywords
Goods & services tax
GST free
GST health
Medical aids & appliances
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  16 August 2001

ISSN: 1445-2782

history
  Date: Version:
  12 October 2000 Original statement
You are here 24 February 2006 Archived

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