ATO Interpretative Decision
ATO ID 2001/509
Goods and Services Tax
GST and the installation of medical alert device componentsFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 and installer of medical alert device components, 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 components, labour and materials used to build up an emergency nurse call system (call system) in situ (on site)?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies components, labour and materials used to build up an emergency nurse call system in situ (on site).
Facts
The entity is a supplier and installer of medical alert device components, and sells a call system to a nursing home.
The call system is built up in situ from various components and forms part of the structure of the building.
The supply by the entity of the call system includes all installation costs such as labour used in hardwiring through walls and ceilings, and the use of materials such as cable for wiring, connectors and plugs, etc. The supply of the call system is only complete and identifiable as such, when it has been fully installed. There is only one charge for the supply, that being the supply of the installed call system.
The emergency call system is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.
There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply. The entity is registered for goods and services tax (GST).
Reasons for Decision
Under subsection 38-45(1) of the GST Act, the supply of a medical aid and 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.
Item 33 in the table in Schedule 3 (Item 33) specifies 'medical alert' devices. It is considered that a medical alert device is a device that is designed for the purpose of alerting medical/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. An emergency call system falls within the meaning of Item 33.
The issue here is whether the supply of components, labour and materials used to build up a call system in situ is a medical alert device within the meaning of Item 33.
Generally, the supply of a medical aid or appliance built up in situ from various components that do not become identifiable as a medical aid or appliance until installation is completed, includes installation charges as part of the GST-free supply. In this case, the call system is built up in situ and is not complete until it is installed. After the installation of the call system, the installed components are identifiable as a 'medical alert' device within the meaning of Item 33. In addition, there is only one charge for the supply. The charge is for the supply of medical alert device components which make up the call system, labour and materials used to build the call system in situ.
The call system is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies components, labour and materials used to build an emergency nurse call system in situ.
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 33
The Regulations
Keywords
Goods & services tax
GST- free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782