Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private ruling

Authorisation Number: 1011683718877

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Goods and services tax (GST) and medical aids and appliances

Question

Is GST payable by you on your supplies of the following software programs?

Advice/Answers

No.

Relevant facts and circumstances

You sell the following software programs:

You supply the software programs wholly within Australia.

The purpose for which each of the software programs is used/Who uses the software programs?`

You detailed the disabilities that each software program has been designed for.

You detailed the special features which make each software program suitable for people with a disability.

You detailed how the special features assist people with a disability:

Whether the content and structure of each of the software programs is of use and interest to people without an illness or disability:

Certain sorts of people would use the software programs in any a certain sort of setting where certain sorts of people are experiencing certain difficulties due to their disability.

Even though the software programs were initially designed for people with disabilities, these programs are sometimes used by people without an illness or disability. Towards this aim, the developer now promotes the programs to all areas of a certain field.

These software programs are purchased by certain sorts of organisations or the users themselves. The reason for purchasing the software is to remove existing barriers and to enable the access and participation of the user in the certain requirements of each individual setting.

Organisations supporting the targeted people may make the software programs available over a network or intranet. As a result any person in the organisation could access the software. The software does not have a 'dual function' and people would only utilise the software in these situations if they were experiencing certain sorts of difficulties.

There is no current quantifiable evidence concerning the use of these software programs by people with or without a disability. Qualitative, anecdotal evidence from certain sorts of organisations suggests however that the software is targeted to and used by people with certain sorts of disabilities.

These software programs have been produced by the developer to meet the needs of people experiencing certain sorts of difficulties due to certain sorts of disabilities.

The dominant market for these certain skill support software programs is people experiencing certain sorts of difficulties due to certain sorts of disabilities. The major types of organisation that purchase this software are certain types of organisations.

Reasons for decision

Summary

GST is not payable on your sales of the software programs as they are GST-free supplies of medical aids or appliances under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

(*Denotes a term defined in section 195-1 of the GST Act)

You satisfy the requirement of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the software programs for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your supplies of the software programs are input taxed. Therefore, what remains to be determined is whether your supplies of the software programs are GST-free.

Medical aids and appliances

Subsection 38-45(1) of the GST Act provides that a supply of a medical aid or appliance is GST-free where the medical aid or appliance:

Item 8 in the table in Schedule 3 to the GST Act lists 'software programs specifically designed for people with disabilities'.

We consider that your software programs are specifically designed for people with a disability because you advised that:

We consider that the software programs would not be widely used by people without an illness or disability, as you advised that:

Therefore, the software programs satisfy the requirements of subsection 38-45(1) of the GST Act. Hence, your supplies of these programs are GST-free.

As not all of the requirements of section 9-5 of the GST Act are satisfied, you do not make taxable supplies of the software programs.

However, in accordance with subsection 38-45(3) of the GST Act, a supply is not GST-free under subsection 38-45(1) of the GST Act if the supplier and the purchaser have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

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).