ATO Interpretative Decision
ATO ID 2002/36
Goods and Services Tax
GST and monitoring of medical alert devicesFOI status: may be released
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 community care provider, making a GST-free supply under subsection 38-30(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the Home and Community Care Act 1985 (HACC Act) in connection with that supply?
Decision
Yes. The entity is making a GST-free supply under subsection 38-30(2) of the GST Act when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the HACC Act in connection with that supply.
Facts
The entity is a community care provider and is registered for goods and services tax (GST).
The entity has a client, an individual care recipient, who requires a medical alert device and associated monitoring services. The supply of the medical alert device is GST-free under subsection 38-45(1) of the GST Act (see ATO ID 2001/509).
The entity supplies the monitoring services to the individual care recipient under an arrangement whereby the actual monitoring of the medical alert device is performed by a monitoring company on behalf of the entity. There is no contractual relationship between the individual care recipient and the monitoring company
The monitoring company charges an amount to the entity for the monitoring services it supplies to the entity. The entity charges an amount to the individual care recipient for the monitoring services that it supplies to the individual care recipient.
The entity receives funding under the HACC Act to supply medical alert devices and monitoring services to people who are living at home and are frail or have a moderate or severe disability.
Reasons for Decision
Subsection 38-30(2) provides that a supply of care is GST-free if the supplier receives funding under the HACC Act in connection with the supply.
The entity receives funding under the HACC Act to supply medical alert devices and monitoring services to people who are frail or who have a moderate or severe disability, and are living at home.
As the entity receives funding under the HACC Act for the provision of the monitoring services, it is receiving funding in connection with the supply. Therefore the entity is making a GST-free supply under subsection 38-30(2) of the GST Act when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the HACC Act in connection with that supply.
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-30(2)
subsection 38-45(1)
Related Public Rulings (including Determinations)
Goods and Services Tax Ruling GSTR 2006/9
ATO ID 2001/509
Keywords
Goods & services tax
GST free
GST health
Section 38-30 - community care
ISSN: 1445-2782
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