ATO Interpretative Decision
ATO ID 2006/1
Goods and Services Tax
GST and sound amplifiers for people with hearing difficultiesFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 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 product that is a sound amplifier for people with hearing difficulties?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act. The product is a 'speech amplification /clarification aid' under Item 14 of Schedule 3 to the GST Act.
Facts
The entity is a supplier of medical aids and appliances. The entity is registered for goods and services tax (GST).
The entity supplies a product that is a sound amplifier for people with hearing difficulties. The product works with a hearing aid and is designed to enable the hearing-impaired person to better listen to what they need to, without the limitation of distance and the noise and distraction of other background noise.
The product is specifically designed and manufactured to benefit a person with a hearing impairment who wears a hearing aid, 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.
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:
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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 (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 14 in the table in Schedule 3 to the GST Act (Item 14) lists 'speech amplification/clarification aids'. A speech amplification/clarification aid is a device that is designed to make a person's voice or sound appear larger and/or clearer and more intelligible.
The entity is supplying a product that is a sound amplifier for people with hearing problems. The product works with a hearing aid and is designed to enable the hearing-impaired person to better listen to what they need to, without the limitation of distance and the noise and distraction of other background noise. As the product makes a person's voice or sound appear clearer and more intelligible, it is a 'speech amplification/clarification aid' under Item 14.
Since the product is specifically designed and manufactured to benefit a person with a hearing impairment who wears a hearing aid, it is specifically designed for people with an illness or disability. Further, it is not widely used by people without an illness or disability. As such, the product satisfies all the requirements in subsection 38-45(1) of the GST Act.
Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a product that is a sound amplifier for people with hearing difficulties.
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
section 38-45(1)
Schedule 3
Schedule 3 table item 14
The Regulations Related ATO Interpretative Decisions
ATO ID 2001/212
Keywords
Goods and services tax
GST free
GST health
Section 38-45 - medical aids & appliances
GST supplies & acquisitions
ISSN: 1445-2782