ATO Interpretative Decision
ATO ID 2001/637
Goods and Services Tax
GST and bottled oxygen and associated hardwareFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 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 medical oxygen bottles and associated hardware?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies medical oxygen bottles and associated hardware.
Facts
The entity is a supplier of medical appliances. In this case, the entity supplies medical oxygen bottles and associated hardware. The associated hardware is in the form of regulators, flow meters, oxygen cylinder support trolleys, stands, and carry bags, back packs and kits which assist patient mobility by enabling hands-free delivery of medical oxygen to the patient.
The associated hardware is used in conjunction with medical oxygen bottles to deliver medical oxygen to patients.
The medical oxygen bottles and associated hardware are specifically designed for people with an illness or disability and are 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 or appliance is GST-free where the medical aid or appliance:
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- 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);
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- is specifically designed for people with an illness or disability; and
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- is not widely used by people without an illness or disability.
The only item of relevance to this case is item 135 in the table in Schedule 3 to the GST Act (Item 135). Item 135 lists 'bottled oxygen and associated hardware'.
The phrase 'associated hardware' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that phrase.
The Macquarie Dictionary (1997) defines the word 'associated' to include the following meaning '...anything usually accompanying or associated with another;...' and it defines the word 'hardware' to include the following meaning, 'the mechanical equipment necessary for conducting an activity...'.
Therefore, 'associated hardware' is considered to be mechanical equipment that usually accompanies or is associated with another piece of equipment, in order to conduct a certain activity.
In this case, the hardware is used in conjunction with medical oxygen bottles to supply oxygen to patients. As such, the hardware is also covered under Item 135 as associated hardware for bottled oxygen.
The medical oxygen bottles and associated hardware are specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
As such, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it makes a supply of medical oxygen bottles and associated hardware.
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 table item 135
The Regulations
Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales
Keywords
Goods & services tax
GST free
GST health
Section 38-45 - medical aids & appliances
ISSN: 1445-2782