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Edited version of private advice
Authorisation Number: 1051842587090
Date of advice: 24 May 2021
Ruling
Subject: GST and the supply of a medical device
Question
Is the supply of a particular medical device, GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes, the supply of the medical device, is GST-free under subsection 38-45(1) of the GST Act.
Relevant facts and circumstances
The entity (you) is registered for goods and services tax (GST).
You sell a medical device for the treatment of a specified medical condition.
You provided information on how the medical device works, its design features, and marketing details.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1)
Reasons for decision
Under subsection 38-45(1) of the GST Act, a supply of a medical aid and appliance is GST-free if:
• it 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 (Regulations);
• it is specifically designed for people with an illness or disability; and
• is not widely used by people without an illness or disability.
Item 69 in the table in Schedule 3 (Item 69) lists 'lower limb orthoses'. The terms 'lower limb' and 'orthoses' are not defined in the GST Act.
Generally, where a term is not defined in the relevant Act, it is usually interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a term has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that term relates (Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222).
It is considered that orthoses, given the context in which the term appears (i.e. in a list of medical aids and appliances), have a special or technical meaning.
Stedman's Medical Dictionary (2000) defines an 'orthoses' as 'an external orthopaedic appliance, as a brace or splint, that prevents or assists movement of the spine or the limbs'. Lower limb is defined to mean 'the hip, thigh, leg, ankle or foot'.
In this case, the medical device is a 'lower limb orthoses' as listed in Item 69.
Based on the information provided, the medical device is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. Therefore, the supply of the medical device is GST-free under subsection 38-45(1) of the GST Act.
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