Edited version of private advice

Authorisation Number: 1051814183144

Date of advice: 19 March 2021

Ruling

Subject: GST and a medical alert device

Question 1

Is your supply of the device GST-free under subsection 38-45(1) of the A New System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No, your supply of the device is not GST-free under subsection 38-45(1) of the GST Act. Your supply is a taxable supply.

Question 2

Are spare parts for the device GST-free under subsection 38-45(2) of the GST Act?

Answer

No. As the supply of the device is not GST-free under subsection 38-45(1) of the GST Act the supply of spare parts is not GST- free under subsection 38-45(2) of the GST Act.

Relevant facts and circumstances

•         You are registered for goods and services tax (GST).

•         You supply a device.

•         You do not sell the device to private clients for home use

Relevant legislative provisions

Subsection 38-45(1) of the A New System (Goods and Services Tax) Act 1999

Subsection 38-45(2) of the A New System (Goods and Services Tax) Act 1999

Subsection 38-45(3) of the A New System (Goods and Services Tax) Act 1999

Reasons for decision

Under subsection 38-45(1) of the GST Act, the supply of a medical aid or appliance is GST-free where the medical aid or appliance is:

•         covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations); and

•         is specifically designed for people with an illness or disability, and

•         is not widely used by people without an illness or disability.

All the above elements must be satisfied for an item to be GST-free under subsection 38-45(1) of the GST Act. The supply of an item that satisfies subsection 38-45(1) of the GST Act will be GST-free all the way down the supply chain and not only when supplied to a person with an illness or disability.

However, pursuant to subsection 38-45(3) of the GST Act, a supplier and purchaser can agree to treat the supply as if it were a taxable supply.

Item 33 in Schedule 3 to the GST Act (Item 33) lists 'medical alert devices' The term '"medical alert" devices' is not defined in the GST Act.

For the purposes of Item 33, a 'medical alert device' is interpreted to mean a device which is designed for the purpose of alerting medical or caring personnel, or an ambulance service, that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment.

To determine whether a thing is covered by Item 33 it is necessary to have regard to the essential character of the thing. This means deciding what the goods essentially are, as distinct from merely identifying one of the characteristics the good might have. This approach relies upon deciding what is the basic nature of the goods and involves consideration of what the goods are made of and what they might be used for.

Considering the information provided in your private ruling application, including product descriptions we consider that the device supplied by you goes beyond the essential character of a medical alert device which is to 'alert'.

It is accepted that the system you supply does provide an alert function, however the additional functionality of the system goes beyond an 'alert' function.

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