ATO Interpretative Decision
ATO ID 2004/845
Goods and Services Tax
GST and production of plaster models for the construction of a crownFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Does the production of a plaster model that is used by the entity, a dental technician, in the construction of a crown, form part of the entity's GST-free supply of the crown to a dentist under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Decision
Yes, the production of a plaster model that is used by the entity in the construction of a crown, forms part of the entity's GST-free supply of the crown to a dentist under subsection 38-45(1) of the GST Act.
Facts
The entity is a dental technician. The entity is not a dentist or dental prosthetist.
The entity supplies a crown to a dentist. The supply of the crown is GST-free under subsection 38-45(1) of the GST Act. In the course of constructing the crown, the entity creates a plaster model. This model is not used or produced for any purpose other than constructing the crown.
The crowns are 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 dentist that the supply of the crown will not be treated as GST-free.
The entity itemises the construction of the plaster model on its bill to the dentist.
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 A New Tax System (Goods and Services Tax) Regulations 1999 (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.
An item which satisfies all of these requirements will be GST-free at all points in the supply chain. This means that supplies of these items do not have to be made to ill or disabled people directly in order to be GST-free. Supplies of these items to business entities, such as to a dentist, will still be GST-free where the above requirements are met.
Item 30 in the table in Schedule 3 (Item 30) lists 'dentures and artificial teeth', which will be GST-free where they have been specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
These terms are not defined in the GST Act and therefore take on their industry meanings. 'Dentures' are artificial restorations of several teeth (partial denture) or all of the teeth of either jaw (full denture) whilst 'artificial teeth' are those which fabricate and replace natural teeth in form and function. The phrase 'artificial teeth' includes one single tooth as well as a multiple of teeth.
The entity supplies a crown to a dentist. In the course of constructing the crown, the entity creates a plaster model. This model is not used or produced for any purpose other than constructing the crown.
The overall supply that the entity is making to the dentist is of the crown. Goods made and consumed in the process of constructing and supplying that crown form part of the overall GST-free supply of the crown. This is the case even where the entity may itemise these components on its bill to the dentist.
Therefore, the production of the plaster model forms part of the entity's GST-free supply of the crown to a dentist under subsection 38-45(1) of the GST Act.
Date of decision: 22 September 2004
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 30
The Regulations
Other References:
Health Industry Partnership - Issues Register - Issue 2.a.15 & Issue 4.a.11
Keywords
Goods and services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 22 September 2004 | Original statement |
| 12 July 2013 | Archived |
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