ATO Interpretative Decision
ATO ID 2004/630
Goods and Services Tax
GST and supply of an implantable drug pumpFOI status: may be released
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This ATO ID contains references to provisions of the A New Tax System (Goods and Services Tax) Regulations 1999, which have been replaced by the A New Tax System (Goods and Services Tax) Regulations 2019. This ATO ID continues to apply in relation to the remade Regulations.
A comparison table which provides the replacement provisions in the A New Tax System (Goods and Services Tax) Regulations 2019 for regulations which are referenced in this ATO ID is available.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 an implantable drug pump?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies an implantable drug pump as it is covered by item 13 in the table in Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).
Facts
The entity is a supplier of medical aids and appliances. The entity supplies an implantable drug pump.
The implantable drug pump is supplied to hospitals and is used to treat patients with chronic pain through the continuous delivery of medication, at a set rate, into the intrathecal space (the area surrounding the spinal cord).
The implantable drug pump is surgically placed under the skin of the abdomen to deliver the medication to a specific site in the body through an infusion set that includes a surgically placed catheter.
The implantable drug pump is 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:
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- is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the 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 13 in the table in Schedule 3 to the GST Regulations (Item 13) lists 'infusion pumps'. An infusion pump is a pump that is used in association with an infusion set to deliver a measured dose of medication.
The implantable drug pump is used to treat patients with chronic pain through the continuous delivery of medication, at a set rate, into the intrathecal space (the area surrounding the spinal cord). The implantable drug pump is surgically placed under the skin of the abdomen to deliver the medication to a specific site in the body through an infusion set that includes a surgically placed catheter. As such, the implantable drug pump is an infusion pump that is covered by Item 13.
In addition, the implantable drug pump is 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 an implantable drug pump.
Date of decision: 21 August 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 13
Other References:
Commonwealth of Australia 2004. GST Pharmaceutical Health Forum - Issues Register - Attachment B - Schedule 3 - Medical aid or appliance (Regulation 38-45.01). Tax Office, viewed 21 May 2004, www.ato.gov.au
Keywords
Goods and services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782