ATO Interpretative Decision

ATO ID 2001/706

Goods and Services Tax

GST and the supply of cardiac catheters to a hospital
FOI status: may be released

This version is no longer current. Please follow this link to view the current version.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 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 a cardiac catheter to a hospital?

Decision

No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a cardiac catheter. The entity is making a taxable supply under section 9-5 of the GST Act when it supplies cardiac catheters to a hospital.

Facts

The entity is a supplier of medical appliances. The entity supplies a cardiac catheter to a hospital.

The cardiac catheter serves as a diagnostic test that is introduced into the heart through an artery to detect a problem area and then, using radio frequency, the problem spot is cauterised enabling the heart rhythm to return to normal.

The entity is registered for goods and services tax (GST). The supply satisfies 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 a medical aid and 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); and
•: is specifically designed for people with an illness or disability; and
•: is not widely used by people without an illness or disability.

A cardiac catheter is not covered under any of the items listed in the table of Schedule 3 nor is it specified in the GST Regulations. As such, the supply of the cardiac catheter is not a GST-free supply 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 supplies cardiac catheters to a hospital.

[Note: A cardiac catheter that is imported into Australia will be a taxable importation that is subject to GST under section 13-15 of the GST Act.]

Date of decision: 5 September 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 13-15
   Division 38
   subsection 38-45(1)
   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 and appliances

Business Line: GST

Date of publication: 30 November 2001

ISSN: 1445-2782

history

	Date:	Version:
You are here	5 September 2001	Original statement
	24 February 2006	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).