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ATO Interpretative Decision

ATO ID 2001/212

Goods and Services Tax

GST and Hearing aids
FOI status: may be released

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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a hearing aid?

Decision

Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a hearing aid.

Facts

The entity is a supplier of medical aids and appliances. In this case, the entity is supplying a hearing aid.

The hearing aid in question is specifically designed for people with an illness or disability; and is not widely used by people without an illness or disability.

There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply.

The entity is registered for goods and services tax (GST).

Reasons For Decision

Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances will be GST-free where the medical aid or appliance:

•
is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (Regulations); and
•
is specifically designed for people with an illness or disability; and
•
is not widely used by people without an illness or disability.

Item 43 of Schedule 3 lists 'hearing aids'. In this case, as the hearing aid is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability; the supply of the hearing aid satisfies the requirements in subsection 38-45(1) of the GST Act.

Therefore, the entity is making a GST-free supply of a hearing aid under subsection 38-45(1) of the GST Act.

Date of decision:  12 October 2000

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 38-45(1)
   Schedule 3
   item 43 of Schedule 3

A New Tax System (Goods and Services Tax) Regulations 1999
   the Regulations

Related ATO Interpretative Decisions
ATO ID 2001/210
ATO ID 2001/211

Keywords
Goods & services tax
GST free
GST health
Medical aids & appliances

Business Line:  GST

Date of publication:  16 August 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 12 October 2000 Original statement
  16 March 2007 Archived

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