1052326972543 | Legal database

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Edited version of private advice

Authorisation Number: 1052326972543

Date of advice: 4 November 2024

Ruling

Subject: GST - sale of medical aids and appliances

Question

Is GST payable on your supply of the following products under section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

• The products you currently supply, which you market as infusion sets.

• IV catheters

• Transfusion sets:

• Catheter protective disk

• Scalp vein sets

• Insulin injection device with a syringe

• Blood collection tubes

• Blood collection needle and holder

• Urine cup and vacuum urine tube

• Multifunction (tube) rack

• Glass vials

• Glass ampules

• Veterinary endoscope

• Sterile water

Answer

GST is not payable on your supply of the following products:

• the products you currently supply, which you market as infusion sets

• an IV catheter where you supply it and an infusion set together

• a scalp vein set where you supply it and an infusion set together

• insulin injection device with syringe

GST is payable on your supply of the following products:

• IV catheter where you do not supply it and an infusion set together

• Transfusion sets

• Catheter protective disk.

• Scalp vein set where you do not supply it and an infusion set together

• Blood collection tubes

• Blood collection needle and holder

• Urine cup and vacuum urine tube

• Multifunction (tube) rack

• Glass vials

• Glass ampules

• Veterinary endoscope

• Sterile water

Relevant facts and circumstances

You are registered for GST.

You are in the business of supplying medical devices. You import these products into Australia, then store them in a warehouse in Australia before supplying them to customers. You sell the products.

You supply the following products:

• Infusion sets

• Catheters

• Transfusion sets

• Catheter protective disk.

• Scalp vein set

• Insulin injection device with syringe

• Blood collection tubes

• Blood collection needle and holder

• Urine cup and vacuum urine tube

• Multifunction (tube) rack

• Glass vials

• Glass ampules

• Veterinary endoscope

• Sterile water

Products you currently supply, which you market as infusion sets

You supply products which you market as infusion sets:

The products you currently supply which you market as infusion sets consist of certain items.

These components ensure compliance with medical standards

The infusion sets are used to introduce fluids such as medications and nutrients intravenously, excluding blood or blood products.

The products you currently supply, which you market as infusion sets:

• are not used in connection with an infusion pump

• are used in connection with an infusion bag or infusion bottle

• can be used in a gravity-fed setup.

Catheters

The catheters consist of certain items.

The catheters are used to deliver medications, fluids, or nutrients, excluding blood and blood products, directly into a patient's vein. The catheters are used in conjunction with an infusion set.

The catheters do not contain a certain type of device.

These types of IV catheters are designed for direct access to a vein, and fluid administration is usually managed via external IV infusion sets, which would contain a certain device. The certain device is a feature of the IV administration set, not the catheter itself.

An IV catheter may be sold on its own or together with an infusion set.

Transfusion sets

The transfusion sets consist of certain items.

A transfusion set is only used for the administration of blood or blood products during transfusions. The material and filtration pore sizes of transfusion sets differ from standard infusion sets; transfusion sets have larger pore sizes to prevent blockages caused by larger blood components, such as platelets and white blood cells. Using a standard infusion set with smaller pore sizes could lead to blockages due to these blood cells, underscoring the unique design and necessity of transfusion sets in medical applications.

Catheter protective disk

The catheter protective disk is a polyurethane foam disk proven to reduce local infections, catheter-related blood stream infections (CRBSI), and skin colonization of microorganisms commonly related to CRBSI. It is used in conjunction with an IV catheter.

Scalp vein set

Scalp vein sets are used for administering fluids, medications, or blood products into a vein. They are often used in IV infusions in patients requiring such treatments.

The scalp vein sets you supply consist of certain items. This setup is part of an IV infusion system.

The scalp vein sets can be connected to a certain device for fluid infusion.

A scalp vein set may or may not be sold together with an infusion set.

Insulin injection device

The insulin injection device has a syringe.

The materials used in the insulin injection device are typically (certain types of materials) for medical safety and compliance with standards for injecting medications such as insulin.

Your insulin injection device is classed by a regulatory authority as a piston syringe.

The insulin injection device is used in connection with a needle.

Blood collection tubes

The blood collection tubes consist of certain items.

A needle is inserted into the vein while the vacuum blood collection tube is then inserted into the needle holder. The blood collection tube is punctured by the needle on the other end of the tool which allows for sample collection.

The blood collection tubes are different from syringes. Blood collection tubes are used to withdraw individual blood samples for pathology analysis, while syringes are used to inject medicine into the body for therapy.

Blood collection needle and holder

This product comprises of a blood collection needle and a holder for the needle. The product does not contain a piston/plunger or a rubber bulb.

The product is not used in connection with a syringe.

The needle is inserted into a patient's vein while a vacuum blood collection tube is then inserted into the needle holder. The blood collection tube is punctured by the needle on the other end of the tool which allows for sample collection.

Urine cup and vacuum urine tube

This product contains a cup, cup cap, needle and tube.

When putting vacuum urine tube into urine cup, the urine tube will collect urine sample automatically from cup. The needle is used to transfer the urine sample from the cup into the vacuum-sealed tube without exposing the sample to external contaminants, maintaining sterility throughout the process.

Multifunction (tube) rack

The aperture of a multifunction tube rack is X mm, that can accommodate tubes whose diameter is equal to or less than Y mm.

Plastic shell for package

This product is a cover placed over a multifunction tube rack to contain the tubes inserted into the apertures of the rack.

Glass vials

Glass vials are sterile containers used to store and deliver injectable medications, vaccines, or other sterile fluids. They are used in the medical field for safe and sterile storage of essential medicines.

Glass ampules

Glass ampules are small, sealed vials containing medications, which are typically broken open for single-use injections. They ensure sterility and safety in administering medications.

Veterinary endoscope

A veterinary endoscope is a medical device used for internal visual examinations in animals, assisting in diagnosing illnesses or guiding surgical procedures. It is a specialized medical tool.

Sterile water

The sterile water is supplied in containers that have a capacity of X mls and it is transferred into containers that each have a capacity of Y mls.

There is no agreement between you and any of your customers that a supply of a product or supplies of a kind that include the supply, not be treated as GST-free.

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 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 38-45

A New Tax System (Goods and Services Tax) Act 1999 section 38-285

Reasons for decision

Summary

A supply of a medical aid or appliance may be GST-free if the product is listed in Schedule 3 to the GST Act (Schedule 3) or the table in subsection 38-45.01(1) of the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations). Not all medical aids and appliances are listed in these tables.

The products you currently supply, which you market as infusion sets are covered by item 6 in the table in subsection 38-45.01(1) of the GST Regulations. Additionally, they are specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability. Therefore, the supply of these products is GST-free under subsection 38-45(1) of the GST Act. Where you supply an IV catheter together with an infusion set, we consider that you make a single overall supply of an infusion set.

Where you supply a scalp vein set together with an infusion set, we consider that you make a single overall supply of an infusion set.

The insulin injection device is covered by item 37 in the table in Schedule 3. Additionally, it is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability. Therefore, the supply of this product is GST-free under subsection 38-45(1) of the GST Act.

The other products that you supply are not covered by either of the medical aids or appliances tables in the GST Act or the GST Regulations. Therefore, the supply of these products is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which the supply of these products is GST-free. Therefore, as all of the requirements of section 9-5 of the GST Act, the supply of these products is subject to GST.

Detailed reasoning

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

You make a taxable supply if

(a) the supply is made for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and

(d) you are *registered or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.

You supply the products in question for consideration and in the course or furtherance of an enterprise that you carry on. Therefore, you meet the requirements of paragraphs 9-5(a) and 9-5(b) of the GST Act.

Your supply of the products are connected with Australia and you are registered for GST. Therefore, you meet the requirements of paragraph 9-5(c) and 9-5(d) of the GST Act.

There are no provisions of the GST Act under which your supply of the products is input taxed.

Therefore, what remains to be determined is whether your supply of the products is GST-free.

The relevant GST-free provisions to consider are subsection 38-45(1) of the GST Act, subsection 38-45(2) of the GST Act and section 38-285 of the GST Act.

Subsection 38-45(1) of the GST Act provides that the supply of certain medical aids and appliances is GST-free if certain criteria are met. It states:

(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

Subsection 38-45(2) of the GST Act states:

A supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing the supply of which would be GST-free subsection (1).

Covered by Schedule 3 or the GST Regulations

The tables under Schedule 3 to the GST Act (Schedule 3) and subsection

38-45.01(1) of the GST Regulations lists medical aids and appliances that will be covered by paragraph 38-45(1)(a) of the GST Act.

Infusion sets

Infusion sets are covered by item 6 in the table in subsection 38-45.01(1) of the GST Regulations (item 6).

The following ATO Interpretative Decision contains references to provisions of the A New Tax System (Goods and Services Tax) Regulations 1999, which have been replaced by the A New Tax System (Goods and Services Tax) Regulations 2019. This ATO ID continues to apply in relation to the remade Regulations.

ATO Interpretative Decision ATO ID 2005/295 Goods and Services Tax: GST and the supply of a spinal catheter kit (ATO ID 2005/295) defines 'infusion set'. It states:

Item 12 in the table in Schedule 3 to the GST Regulations (Item 12) lists 'infusion sets'. The phrase 'infusion sets' is not defined in the GST Act or GST Regulations.

Generally, where a phrase is not defined in the relevant Act or regulations, it is usually interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a phrase has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that phrase relates (Herbert Adams Ltd v. Federal Commissioner of Taxation (1932) 47 CLR 222; (1932) 2 ATD 31).

An 'infusion set' is a sterile device used for introduction of fluid, including medication or nutrient but excluding blood and blood products, by means other than through the gastrointestinal tract. It normally consists of several parts that together form the infusion set. These parts consist of a sterile container with an attached drip chamber allowing fluid to flow one drop at a time, a long sterile tube with a clamp to regulate the flow, a connector to attach to the access device and possibly connectors to allow another infusion set to be connected into the same line. A set can be gravity fed or can be used in conjunction with an infusion pump.

The products you currently supply, which you market as infusion sets consist of certain items.

These components ensure compliance with medical standards

The products you currently supply which you market as infusion sets:

contain the same components as the components of an infusion set, as set out in ATO ID 2005/295; and
are used for the introduction of fluid, including medication and nutrients, but excluding blood and blood products, by means other than through the gastrointestinal tract; and
can be gravity fed.

Therefore, the products you currently supply which you market as infusion sets are covered by item 6 in the table in subsection 38-45.01(1) of the GST Regulations.

Infusion sets are specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability.

Therefore, your supply of the products you currently supply, which you market as infusion sets is GST-free under subsection 38-45(1) of the GST Act. Hence, GST is not payable on your supply of these products.

Catheters

The IV catheters do not include a certain type of device. These types of IV catheters are designed for direct access to a vein, and fluid administration is usually managed via external IV infusion sets, which would contain a certain device. The certain device is a feature of the IV administration/infusion set; not the catheter itself.

In accordance with ATO ID 2005/295, the catheter products in your case are not infusion sets, as they do not contain a certain device. Additionally, the catheter products in your case are not infusion pumps. Therefore, they are not covered by item 6 of the GST Regulations. There are not covered by any other item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations. Therefore, when you supply an IV catheter on its own, it will not be GST-free under subsection 38-45(1) of the GST Act.

There are no other provisions of the GST Act under which your supply of a catheter is GST-free. Therefore, when you supply a catheter on its own, GST is payable on this supply.

However, where you supply an IV catheter together with an infusion set, we would consider that the overall supply is a supply of an infusion set, which is a GST-free supply.

Transfusion sets

Transfusion sets are used to introduce blood into the body. Therefore, in accordance with ATO ID 2005/295, transfusion sets are not infusion sets.

Transfusion sets are not covered by any of the items in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of transfusion sets is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of transfusion sets is GST-free.

Therefore, GST is payable on your supply of transfusion sets.

Catheter protective disk

The disk is not a device of a type listed in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations. Also, the disk is not a spare part for a device listed in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Although it is used in conjunction with an infusion set, the disk is not a component of an infusion set and therefore, the disk is not a spare part for an infusion set.

Hence, your supply of the disk is not GST-free under subsection 38-45(1) or subsection 38-45(2) of the GST Act. There are no other provisions of the GST Act under which your supply of the disk is GST-free.

Therefore, GST is payable on your supply of the disk.

Scalp vein sets

Although the scalp vein sets can be used as part of an IV infusion set up, the scalp vein sets do not include a certain device. Therefore, based on the definition of infusion set out in ATO ID 2005/295, the scalp vein sets are not infusion sets. Additionally, they are not infusion pumps. Therefore, they are not covered by item 6 in the table in subsection 38-45.01(1) of the GST Regulations.

The scalp veins set are not covered by any other item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of scalp vein sets is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the scalp vein sets is GST-free.

Therefore, GST is payable on your supply of scalp vein sets.

However, where you supply a scalp vein set together with an infusion set, we would consider that the overall supply is a supply of an infusion set, which is a GST-free supply.

Insulin injection device

Item 37 in the table in Schedule 3 lists 'needles and syringes' under the category heading 'Diabetes'.

Issue 4.a.4 of the Health Industry Partnership Issues Register (Issues Register) states:

Item 37 of Schedule 3 refers to needles and syringes under the category heading, "Diabetes". It is not only needles and syringes for use by diabetics which fall within item 37. However, it is considered that the individual items 'needles' and 'syringes' must be interpreted by reference to the fact that they are listed together. On this basis, it is considered that a needle that is not designed for use with a syringe, or a syringe that is not designed for use with a needle, will not be covered by item 37 in Schedule 3. Thus, an item such as a needle for inserting sutures is not covered by Schedule 3.

The supply of needles and syringes that are covered by item 37 will be GST-free if specifically designed for people with an illness or disability and are not widely used by people without an illness or disability. For example, needles for insulin dependent diabetics will be GST-free.

The Macquarie Dictionary, 2024 edition defines syringe as follows:

1. Medicine a small device consisting of a glass, metal, rubber, or plastic tube, narrowed at its outlet, and fitted with either a piston or a rubber bulb for drawing in a quantity of fluid and ejecting it in a stream, used for cleaning wounds, injecting fluids into the body, etc.

The insulin injection device consists of various parts.

The insulin injection device meets the definition of syringe as confirmed by a certain regulatory authority.

The insulin injection device is used in connection with a needle, which is a requirement of the issue register.

The insulin injection device has been specifically designed for injecting insulin into diabetics.

Hence, we consider that it is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability.

Therefore, the supply of your insulin injection device is GST-free under subsection 38-45(1) of the GST Act.

Hence, GST is not payable on your supply of the insulin injection device.

Blood collection tubes

The blood collection tubes consist of certain items.

The blood collection tubes are not needles.

The blood collection tubes are not fitted with a piston/plunger or a rubber bulb for drawing in a quantity of fluid and ejecting it in a stream. Therefore, they are not syringes.

Hence, the blood collection tubes are not covered by item 37.

Blood collection tubes are not covered by any of the items in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Therefore, your supply of blood collection tubes are not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the blood collection tubes is GST-free.

Hence, GST is payable on your supply of blood collection tubes.

Blood collection needle and holder

This product comprises of a blood collection needle and a holder for the needle. The product does not contain a piston/plunger or a rubber bulb.

This product is not used in connection with a syringe. Therefore, the product is not covered by item 37 (in accordance with issue 4.1.4 of the issue register). The product is not covered by any other item in Schedule 3 or the medical aids and appliances table in subsection 38-45.01(1) of the GST Regulations. Hence, the supply of this product is not GST-free under subsection 38-45(1) of the GST Act.

There are no other provisions of the GST Act under which the supply of this product is GST-free.

Hence, GST is payable by you on your supply of this product.

Urine cup and vacuum urine tube

This product contains a cup, cup cap, needle and tube.

When putting vacuum urine tube into urine cup, the urine tube will collect urine sample automatically from cup.

Item 15 in the table in Schedule 3 (item 15) lists urine/faecal drainage/collection devices.

The urine cup is used by healthcare providers to collect a urine sample that has been transferred from a patient's initial collection cup for the purpose of medical testing, particularly in the diagnosis of illnesses such as urinary tract infections. As the urine cup you supply is not used by the patient to collect the sample, we do not consider that it is a urine collection device. Therefore, it is not covered by item 15.

Hence, your supply of the urine cup and vacuum tube product is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which the supply of this product is GST-free.

Therefore, GST is payable on your supply of this product.

Multifunction (tube) rack

The aperture of a multifunction tube is designed to accommodate tubes whose diameter is equal to or less than X mm.

This rack is not covered by any item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of the rack is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the rack is GST-free.

Therefore, GST is payable on your supply of the rack.

Plastic shell for package

This product is a cover placed over a multifunction tube rack to contain the tubes inserted into the apertures of the rack.

The shell is not covered by any item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of the shell is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the shell is GST-free.

Therefore, GST is payable on your supply of the shell.

Glass vials

The glass vials are not covered by any of the item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of the glass vials is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the glass vials is GST-free.

Therefore, GST is payable on your supply of the glass vials.

Glass ampules

The glass ampules are not covered by any of the item numbers in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of the glass ampules is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the glass ampules is GST-free.

Therefore, GST is payable on your supply of the glass ampules.

Veterinary endoscope

Veterinary endoscopes are not listed in Schedule 3 or the table in subsection 38-45.01(1) of the GST Regulations.

Hence, your supply of the endoscope is not GST-free under subsection 38-45(1) of the GST Act. There are no other provisions of the GST Act under which your supply of the endoscope is GST-free.

Therefore, GST is payable on your supply of the endoscope.

Sterile water

A supply of water is GST-free under subsection 38-285(1) of the GST Act.

However, subsection 38-285(2) of the GST Act states:

However, a supply of water is not GST-free under this section if it is

(a) supplied in a container; or

(b) transferred into a container

that has a capacity of less than 100 litres or such other quantity as the regulations specify.

The GST Regulations do not specify a different quantity to 100 litres.

The sterile water you supply is supplied in a container that has a capacity of less than 100 litres and is transferred into such a container. Therefore, your supply of sterile water is not GST-free under section 38-285 of the GST Act.

There are no other provisions of the GST Act under which your supply of sterile water is GST-free.

Therefore, GST is payable on your supply of sterile water.

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