ATO Interpretative Decision
ATO ID 2001/280
Goods and Services Tax
GST and Doorbell Alert SystemFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a supplier of medical aids and appliances, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a doorbell alert system?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a doorbell alert system.
Facts
The entity is a supplier of medical aids and appliances. In this case, the entity is supplying a specifically designed doorbell alert system. The doorbell alert system is made up of two components; a doorbell component and a remote component. The two components cannot work independently.
The remote portion has a combined sound and flashing strobe alert and is completely portable.
The doorbell alert system is specifically designed for people whose disabilities range from minor hearing problems to profound hearing loss.
The doorbell alert system is not widely used by people without an illness or disability.
The entity is registered for goods and services tax (GST).
There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply.
Reasons for Decision
Under subsection 38-45(1) of the GST Act the supply of a medical aid or appliance is GST-free if:
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- 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); and
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- it is specifically designed for people with an illness or disability; and
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- it is not widely used by people without an illness or disability.
Item 47 in the table in Schedule 3 lists 'visual/tactile alerting devices' (Item 47). This term is not defined in the GST Act and must therefore be given its ordinary meaning. The Macquarie Dictionary (1997) defines 'alert' to mean 'an alarm or warning'. Based on this definition, it is considered that 'visual/tactile alerting devices' are devices that are designed to alert vision and hearing impaired people to a strong occurrence, danger or presence.
In this case, the doorbell alert system alerts hearing impaired persons to the fact that someone is present at the door of their residence, via a flashing strobe light. Therefore, it is considered that the doorbell alert system falls within the scope of Item 47.
As the doorbell alert system is covered by Schedule 3; is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability; the entity is making a GST-free supply of a medical aid or appliance under subsection 38-45(1) of the GST Act.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019. |
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 47
The Regulations
Keywords
Goods & services tax
GST free
GST health
Medical aids & appliances
ISSN: 1445-2782