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Edited version of private ruling
Authorisation Number: 1011611253123
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Subject: GST & Medical Aids & Appliance
Questions
Is the supply of mobile infant beds with a Trendelenberg and reverse Trendelenberg which are acquired by hospitals for newborn and sick babies GST free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act)?
Advice/Answers
No, the supply of mobile infant beds with a Trendelenberg and reverse Trendelenberg which are acquired by hospitals for newborn and sick babies is not GST free under section 38-45 of the GST Act.
Relevant facts
The infant bed (the bed) is imported and consists of a Trendelenberg and Reverse Trendelenberg not found on standard infant beds. This feature is a hospital requirement and is used to assist with various hospital procedures.
The beds can be used for both newborn and sick babies so that the bed could be easily moved close to a mother for the purposes of feeding the infant.
We have been provided with a brochure with a description and diagram of the bed. The brochure provides that the bed is a sturdy unit ideal for use in the hospital maternity wards, home use or for hire.
Specific features of a bed for illness or disabilities are:
Trendelenberg and reverse Trendelenberg
· Separate capsule to enable transfer of infant to shower/bath facility
· Height adjustment for nurse attendance
· Mattress is hospital grade foam (type H)
The bed is specifically designed for babies with a sickness or a disability.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 (GST Act), section 38-45
Schedule 3 - Medical aids and appliances of A New Tax System (Goods and Services Tax) Act 1999.
Reasons for decision
Subsection 38-45(1) of the GST Act provides that a supply is GST-free if the medical aid and appliance is:
(a) covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and
(b) specifically designed for people with an illness or disability; and is not widely used by people without an illness or disability.
Schedule 3 illustrates a list of items which are GST-free. Item 61 deals with the category of 'hospital type beds'.
In determining whether a medical aid and appliance is specifically designed for people with an illness or disability reference is made to the designer's/manufacturer's intention of how the good is to be used and it's features. Indicators of the designer's/manufacturer's intention of how a good is to be used include how the good is marketed and the type of retail outlets at which the goods can be purchased. Further, in determining whether a medical aid and appliance is used by people without an illness or disability reference should be made to how the wider community uses these goods. That is, the common purpose for which the goods are purchased.
Based on the facts we are of the view that this bed is not specifically designed for children with an illness or disability. The features you have outlined are primarily designed for the operator of the bed namely, easy access and adjustments with the Trendelenberg and reverse Trendelenberg. We are of the view that none of these features are there to alleviate the pain or improve the comfort of a sick or disabled child. Furthermore, because it is acquired by hospitals for the use of newborn infants both who are not sick and sick, we are of the view that this bed will be widely used by people (infants) without an illness or disability. Accordingly, the supply of this bed is not GST free under section 38-45 of the GST Act as it does not satisfy paragraph 38-45(1)(b) of the GST Act.
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