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Edited version of private advice
Authorisation Number: 1012635575656
Ruling
Subject: Goods and services tax and medical aids and appliances
Question
Is Product B a GST-free medical aid or appliance in accordance with section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No. Product B is not a GST-free medical aid or appliance in accordance with section 38-45 of the GST Act.
Relevant facts and circumstances
You have developed Product B.
Product B is made of a flexible silicon band that conforms to the shape and size of bottles and packets that contain medication. The front of the band has a shield with a writing surface in the middle as well as other provisions on either side of the shield.
Product B is attached to bottles and packets that contain medication thus enabling the easy identification of the type, the dosage and the timing requirements of the medication that it is attached to.
Product B is available in several colours and comes with a marker pen.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
A New Tax System (Goods and Services Tax) Act 1999 section 38-45
A New Tax System (Goods and Services Tax) Act 1999 Schedule 3 - Medical aids and appliances
A New Tax System (Goods and Services Tax) Regulations 1999 Schedule 3 - Medical aids and appliances
Reasons for decision
The GST status of the supply of medical aids and appliance is determined by the provisions of section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Of relevance, subsection 38-45(1) of the GST Act states:
(1) A supply is GST-free if:
(a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and
(b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.
Therefore, for a medical aid or appliance to be GST-free it has to meet all of the above conditions.
Schedule 3 (medical aids and appliances) to the GST Act ("Schedule 3") contains a comprehensive list of medical aids and appliances which are used by people with illnesses and disabilities. To satisfy paragraph 38-45(1)(a) of the GST Act, the aid or appliance must be included in this list.
The following are the main categories of medical aids and appliances included in column two of Schedule 3:
• cardiovascular
• communication aids for people with disabilities;
• continence;
• daily living for people with disabilities;
• diabetes;
• dialysis;
• footwear for people with disabilities;
• hearing/speech;
• home modifications for people with disabilities;
• mobility of people with disabilities;
• pain relief delivery systems;
• personal hygiene for people with disabilities;
• respiratory appliances;
• safety helmets;
• skin;
• stoma; and
• vision
In each of the above categories is listed one or more specific medical aids or appliances (see column 3 of Schedule 3). You have asked us to consider if Product B comes within items 5 (Communication cards), 33 ("medical alert" devices) or any other items of Schedule 3. We consider these below:
Item 5 of Schedule 3
Items 5 is categorised in Schedule 3 as "Communication aids for people with disabilities". Item 5 specifies "communication cards" as a type of medical aid or appliance in this category. Therefore, to fall within this category, the "communication cards" need to be a communication aid for people with a disability.
Product B however, is a product that is attached to bottles and packets that contain medication to enable the easy identification of the type, the dosage and the timing requirements of the medication it is attached to. It is not a communication aid for people with a disability.
It is therefore our view that Product B does not come within item 5 of Schedule 3.
Item 33 of Schedule 3
Item 33 is categorised in Schedule 3 as "Daily living for people with disabilities". Item 33 specifies "medical alert" devices as a type of medical aid or appliance in this category.
The GST Pharmaceutical Health Forum - issues register - attachment A - schedule 3 - medical aid or appliance ("GPHF Issue register") provides a description of "medical alert" device as:
A device which is designed for the purpose of alerting medical/caring personnel or an ambulance service that a person is in need of emergency medical assistance.
Given the above description of medical alert devices, it is our view that the Product B does not come within item 33 of Schedule 3.
Any other item of Schedule 3 to the GST Act
We have examined the other categories of Schedule 3 and the descriptions of medical aids or appliances as provided for in the GPHF Issue register and consider that Product B does not come within any other items of Schedule 3.
Accordingly, Product B does not meet the provisions of paragraph 38-45(1)(a) of the GST Act. Therefore your supply of Product B is not a supply of a GST-free medical aid or appliance.
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