ATO Interpretative Decision

ATO ID 2001/266 (Withdrawn)

Goods and Services Tax

GST and pH imbalance test kit
FOI status: may be released

This GST ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decision

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 health care products, 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 sells a pH imbalance test kit to a health professional?

Decision

No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it sells a pH imbalance test kit to a health professional. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a supplier of medical aids and appliances. In this case, the entity is selling a pH imbalance test kit to a health professional. The test kit is comprised of a reactive test strip and an applicator. The kit is used to test vaginal fluid to screen for pH imbalance that is an indicator of pre-term birth. The kit may also be used to screen for pH imbalance in patients who have a history with, or a high risk of developing, vaginal or bacterial infections.

The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.

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.

pH imbalance test kits are not covered by Schedule 3 or the Regulations. Therefore, the supply of the pH imbalance test kit is not GST-free under subsection 38-45(1) of the GST Act.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it sells a pH imbalance test kit to a health professional.

[Note: [1] Under section 38-47 of the GST Act, the Health Minister may, by determination in writing, declare the supply of certain health goods to be GST-free. To date, the Health Minister has not made a determination in relation to pH imbalance test kits.

[2] In this case, the entity is making a supply to a health professional. Under section 38-50 of the GST Act, a supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and certain other conditions are satisfied (subsection 38-50(4) of the GST Act). However, the product is only GST-free under section 38-50 of the GST Act if, and only if the product is for human use or consumption and the supply is to an individual for private or domestic use or consumption.]

Date of decision: 26 July 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   subsection 38-45(1)
   section 38-47
   section 38-50
   subsection 38-50(4)
   Division 40
   Schedule 3

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

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

Business Line: Goods and Services Tax

Date of publication: 4 September 2001

ISSN: 1445-2782

history

	Date:	Version:
	26 July 2001	Original statement
You are here	24 February 2006	Archived

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