ATO Interpretative Decision
ATO ID 2001/639
Goods and Services Tax
GST and oxygen sensors for respiratory appliancesFOI status: may be released
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 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 oxygen sensors for ventilators and sleep apnoea machines?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies oxygen sensors for ventilators and sleep apnoea machines.
Facts
The entity is a supplier of medical appliances. In this case, the entity is making a supply of oxygen sensors.
Oxygen sensors are devices used for measuring the oxygen concentration in a patient's breathing mixture. The oxygen sensors, in this case, are used in conjunction with ventilators and sleep apnoea machines.
'Ventilators' are covered under item 123 in the table in Schedule 3 to the GST Act (Item 123). 'Sleep apnoea machines' are covered under item 128 in the table in Schedule 3 to the GST Act (Item 128). In this case, the supply of the ventilators and sleep apnoea machines satisfy the other requirements of subsection 38-45(1) of the GST Act and, as such, are GST-free.
The oxygen sensors are specifically designed for people with an illness or disability and 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 a medical aid or appliance is 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 (GST Regulations);
- •
- is specifically designed for people with an illness or disability; and
- •
- is not widely used by people without an illness or disability.
The only item of relevance to this case is item 127 in the table in Schedule 3 to the GST Act (Item 127). Item 127 lists, 'respiratory appliance accessories'.
The word 'accessories' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that word.
The Macquarie Dictionary (1997) defines the word 'accessories' to be the plural of the word 'accessory'. The word 'accessory is defined to include the following meaning, 'a subordinate part or object; something added or attached...'.
In this case, the oxygen sensor is a subordinate part which is attached and used in conjunction with ventilators and sleep apnoea machines. As such, it is an accessory to the ventilators and sleep apnoea machines.
Ventilators are listed at Item 123 and sleep apnoea machines are listed at Item 128. Under section 182-15 of the GST Act and paragraph 182-10(2)(b) of the GST Act, the category heading of 'Respiratory appliances - other products for those with breathing difficulties' may be used to confirm that the meaning in Item 123 and Item 128 is the ordinary meaning. As such, ventilators and sleep apnoea machines are respiratory appliances.
Therefore, the oxygen sensors are respiratory appliance accessories and are covered under Item 127.
The oxygen sensors are specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies oxygen sensors for ventilators and sleep apnoea machines.
Date of decision: 7 September 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
subsection 38-45(2)
Schedule 3
Schedule 3 table item 123
Schedule 3 table item 127
Schedule 3 table item 128
Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales.
Keywords
Goods & services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782