Edited version of private ruling

Authorisation Number: 1011683718877

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Ruling

Subject: Goods and services tax (GST) and medical aids and appliances

Question

Is GST payable by you on your supplies of the following software programs?

· Software program 1

· Software program 2

· Software program 3

· Software programs 4

· Software program 5

Advice/Answers

No.

Relevant facts and circumstances

You sell the following software programs:

· Software program 1

· Software program 2

· Software program 3

· Software programs 4

· Software program 5

You supply the software programs wholly within Australia.

The purpose for which each of the software programs is used/Who uses the software programs?`

· Software program 1 is a certain skill support software program to support users who have certain sorts of difficulties. Users in certain settings or programs access this software program.

· Software program 2 is a suite of a certain skill support software programs to support users who have certain sorts of difficulties. Users in certain settings or programs access this suite of software programs.

· Software program 3 is a certain skill support software program to support users who have certain sorts of difficulties. Users in certain settings and programs access this software program.

· Software programs 4 are a certain skill support software programs to support users who have certain sorts of difficulties. Users in certain settings and programs access these software programs.

· Software program 5 is a certain skill support software program to support users who have certain sorts of difficulties. Users in certain settings and programs access this software program.

You detailed the disabilities that each software program has been designed for.

You detailed the special features which make each software program suitable for people with a disability.

You detailed how the special features assist people with a disability:

Whether the content and structure of each of the software programs is of use and interest to people without an illness or disability:

· Some of the software programs have been specifically developed to support certain needs of people with certain sorts of disabilities. People without disabilities may find some individual features useful but due to the cost of each package would not consider their purchase cost effective. The individual features that may be of benefit are available either for little or no cost, or through mainstream software programs.

· Software program 3 would be of interest to people who have certain sorts of difficulties and need additional support when doing certain tasks

· In practise, however, there are many free programs online or very low cost applications for certain sorts of devices which would suffice for certain sorts of people without disabilities. Only those with significant disabilities require the full suite of features offered by paying the premium pricing attached to certain software programs.

Certain sorts of people would use the software programs in any a certain sort of setting where certain sorts of people are experiencing certain difficulties due to their disability.

Even though the software programs were initially designed for people with disabilities, these programs are sometimes used by people without an illness or disability. Towards this aim, the developer now promotes the programs to all areas of a certain field.

These software programs are purchased by certain sorts of organisations or the users themselves. The reason for purchasing the software is to remove existing barriers and to enable the access and participation of the user in the certain requirements of each individual setting.

Organisations supporting the targeted people may make the software programs available over a network or intranet. As a result any person in the organisation could access the software. The software does not have a 'dual function' and people would only utilise the software in these situations if they were experiencing certain sorts of difficulties.

There is no current quantifiable evidence concerning the use of these software programs by people with or without a disability. Qualitative, anecdotal evidence from certain sorts of organisations suggests however that the software is targeted to and used by people with certain sorts of disabilities.

These software programs have been produced by the developer to meet the needs of people experiencing certain sorts of difficulties due to certain sorts of disabilities.

The dominant market for these certain skill support software programs is people experiencing certain sorts of difficulties due to certain sorts of disabilities. The major types of organisation that purchase this software are certain types of organisations.

Reasons for decision

Summary

GST is not payable on your sales of the software programs as they are GST-free supplies of medical aids or appliances under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

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

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that

you *carry on; and

(c) the supply is *connected with Australia; 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.

(*Denotes a term defined in section 195-1 of the GST Act)

You satisfy the requirement of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the software programs for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your supplies of the software programs are input taxed. Therefore, what remains to be determined is whether your supplies of the software programs are GST-free.

Medical aids and appliances

Subsection 38-45(1) of the GST Act provides that a supply of a medical aid or appliance is GST-free where the medical aid or appliance:

· is covered by Schedule 3 to the GST Act, or specified in the A New Tax System (Goods and Services Tax) Regulations 1999;

· is specifically designed for people with an illness or disability; and

· is not widely used by people without an illness or disability.

Item 8 in the table in Schedule 3 to the GST Act lists 'software programs specifically designed for people with disabilities'.

We consider that your software programs are specifically designed for people with a disability because you advised that:

· These certain skill support software programs have been produced by the developer to meet the needs of people experiencing certain sorts of difficulties due to certain sorts of disabilities.

· You detailed the disabilities that each software program has been designed for.

· Certain special features make each software program suitable for people with a disability.

· Certain special features assist people with a disability in certain ways.

We consider that the software programs would not be widely used by people without an illness or disability, as you advised that:

· The dominant market for these certain skill support software programs is people experiencing certain sorts of skill difficulties due to certain sorts of disabilities.

· These certain skill support software programs have been produced by the developer to meet the needs of people experiencing certain sorts of difficulties due to certain sorts of disabilities.

· Certain sorts of people would use the software programs in a certain type of setting where the users are experiencing certain sorts of difficulties due to certain sorts of disabilities.

· In practise, there are many free programs online or very low cost applications for certain sorts of devices which would suffice for certain sorts of people without disabilities. Only those with significant disabilities require the full suite of features offered by paying the premium pricing attached to certain software programs.

· People without disabilities may find some individual features useful but due to the cost of each package would not consider their purchase cost effective.

Therefore, the software programs satisfy the requirements of subsection 38-45(1) of the GST Act. Hence, your supplies of these programs are GST-free.

As not all of the requirements of section 9-5 of the GST Act are satisfied, you do not make taxable supplies of the software programs.

However, in accordance with subsection 38-45(3) of the GST Act, a supply is not GST-free under subsection 38-45(1) of the GST Act if the supplier and the purchaser have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies.