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This edited version has been archived due to the length of time since original publication.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.

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Edited version of your written advice

Authorisation Number: 1051404041071

Date of advice: 30 July 2018

Ruling

Subject: GST and medical aids and appliances

Question

Is the supply of the Headset by you to customers in Australia GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

All further references are to the GST Act unless specified otherwise.

Answer

Yes. The supply of the Headset by you to customers in Australia is GST-free under subsection 38-45(1).

Relevant facts and circumstances

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 – subsection 38-45(1)

Reasons for decision

Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:

(Terms marked with asterisks (*) are defined in section 195-1 of the GST Act).

The supply of the Headset is not input taxed under any provision of the GST Act. What remains to be determined is whether or not the supply of the Headset is GST-free.

A supply of a medical aid or appliance will be GST-free if it satisfies the requirements of subsection 38-45(1).

Pursuant to subsection 38-45(1) a supply of certain medical aids and appliances is GST-free if:

Subsections 38-45(2) and (3) further provides:

Schedule 3 of the GST Act includes a list of items relating to communication aids for people with disabilities. Item 14 of Schedule 3 (item 14) in this list specifies speech amplification/clarification aids. A speech amplification/clarification aid is a device designed to make sound appear larger and/or clearer and more intelligible.

The Headset is designed to assist those with hearing loss to hear the TV clearly and at their own preferred volume. Given the nature of the Headset including its function to make sound appear larger and clearer, it is a ‘speech amplification/clarification aid’ under item 14.

Furthermore, the clarity settings, volume control and amplifier are features made for those with hearing loss. This together with specific marketing of the Headset for use by those with hearing loss which would negate the likelihood that the Headset will be used by those with normal hearing (those without a disability) demonstrates the Headset not being widely used by people without an illness or disability. As such, the Headset satisfies all the requirements under subsection 38-45(1).

Therefore the supply of the Headset by you to customers in Australia is GST-free under subsection 38-45(1).

Additional information

We note that subsection 38-45(3) of the GST Act is not applicable in this case as this private ruling is provided on the basis that you and the recipient do not have an agreement agreeing that the supply of the Headset is not GST-free.

Spare parts

Please note that the supply of a specifically designed spare part for a GST-free medical aid or appliance would be treated as GST-free under subsection 38-45(2). However, generic spare parts that are not specifically designed for a GST-free medical aid or appliance are not GST-free.

This private ruling concerns the GST treatment of the supply of the Headset as one product and not individual supply or supplies of the respective components or spare parts. Accordingly, although the supply of the Headset is made up of components and spare parts, it is not a spare part. Therefore subsection 38-45(2) of the GST Act does not have application to the supply of the Headset.

This private ruling does not cover separate and individual supplies of components such as ear-tips and lithium batteries.


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