ATO Interpretative Decision
ATO ID 2005/295
Goods and Services Tax
GST and the supply of a spinal catheter kitFOI status: may be released
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This ATO ID contains references to provisions of the A New Tax System (Goods and Services Tax) Regulations 1999, which have been replaced by the A New Tax System (Goods and Services Tax) Regulations 2019. This ATO ID continues to apply in relation to the remade Regulations.
A comparison table which provides the replacement provisions in the A New Tax System (Goods and Services Tax) Regulations 2019 for regulations which are referenced in this ATO ID is available.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 spinal catheter kit?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a spinal catheter kit.
Facts
The entity is a supplier of medical aids and appliances. The entity supplies a spinal catheter kit consisting of a spinal catheter, needle, stylet and filter to hospitals.
The spinal catheter is a thin, flexible tube which is inserted by medical procedure through the skin into the space surrounding the spinal cord to deliver medication. The catheter is not part of the pump, it is connected to an external pump that is filled with the medication that is released at a set rate through the spinal catheter.
The spinal catheter is used for short periods of time to administer medications and trial spinal medications on patients. It is specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
The entity is registered for goods and services tax (GST). 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 a medical aid or appliance is GST-fee where the medical aid or appliance is:
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- 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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- specifically designed for people with an illness or disability, and
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- not widely used by people without an illness or disability.
Item 12 in the table in Schedule 3 to the GST Regulations (Item 12) lists 'infusion sets'. The phrase 'infusion sets' is not defined in the GST Act or GST Regulations.
Generally, where a phrase is not defined in the relevant Act or regulations, it is usually interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a phrase has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that phrase relates (Herbert Adams Ltd v. Federal Commissioner of Taxation (1932) 47 CLR 222; (1932) 2 ATD 31).
An 'infusion set' is a sterile device used for introduction of fluid, including medication or nutrient but excluding blood and blood products, by means other than through the gastrointestinal tract. It normally consists of several parts that together form the infusion set. These parts consist of a sterile container with an attached drip chamber allowing fluid to flow one drop at a time, a long sterile tube with a clamp to regulate the flow, a connector to attach to the access device and possibly connectors to allow another infusion set to be connected into the same line. A set can be gravity fed or can be used in conjunction with an infusion pump.
The spinal catheter kit is used to administer medication, at a set rate, into the space surrounding the spinal cord. The spinal catheter is surgically placed under the skin to deliver the medication to a specific site in the patient's spine. The medication that will be infused is supplied by connecting the spinal catheter to an external pump containing the medication.
The spinal catheter kit, which contains the spinal catheter, needle, stylet and filter, enables the infusion of medicine to be made and is an 'infusion set' as specified at Item 12.
The spinal catheter kit is used for short periods of time to administer medications and trial spinal medications on patients and is therefore, specifically designed for people with an illness or a disability and is not widely used by people without an illness or disability.
Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a spinal catheter kit.
Date of decision: 14 October 2005
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3 table item 12
Case References:
Herbert Adams Ltd v. Federal Commissioner of Taxation
(1932) 47 CLR 222
(1932) 2 ATD 31
Other References:
Commonwealth of Australia GST Pharmaceutical Health Forum - Issues Register-Attachment B - Schedule 3 - Medical aid or appliance (Regulation 38-45.01)
Keywords
Goods and services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782
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