ATO Interpretative Decision
ATO ID 2004/521
Goods and Services Tax
GST and stoma cream productFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 an 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 cream that is listed on the Stoma Appliance Schedule?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a cream that is listed on the Stoma Appliance Schedule.
Facts
The entity is a supplier of medical aids and appliances. The entity supplies a cream that is listed on the Stoma Appliance Schedule under the Stoma Appliance Scheme. This scheme is administered by the Commonwealth Department of Health and Ageing.
The cream protects the user's skin and the listing on the Stoma Appliance Schedule identifies the cream as a product that assists people who have to wear an ostomy product as a consequence of having a stoma created by surgery.
The cream 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 of the supply 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:
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- is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 2019(GST Regulations)
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- is specifically designed for people with an illness or disability, and
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- is not widely used by people without an illness or disability.
Item 142 in the table in Schedule 3 (Item 142) lists stoma products including all bags and related equipment for patients with colostomies and ileostomies.
The Stoma Appliance Schedule under the Stoma Appliance Scheme is administered by the Commonwealth Department of Health and Ageing and any product listed on the Stoma Appliance Schedule is a stoma product covered under Item 142.
The entity supplies a cream that is listed on the Stoma Appliance Schedule under the Stoma Appliance Scheme, which is administered by the Department of Health and Ageing.
As such, the entity's product satisfies the first requirement under subsection 38-45(1) of the GST Act.
In addition, the cream is specifically designed for people with an illness or disability and is 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 a cream that is listed on the Stoma Appliance Schedule.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019. |
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 142
Table of Content
Other References:
Stoma Appliance Scheme, Commonwealth Department of Health and Ageing - 'Continence Aids Assistance Scheme', The National Continence Management Strategy.
Keywords
Goods and services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782