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Edited version of private ruling
Authorisation Number: 1011704205906
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Ruling
Subject: GST and medical aids and appliances
Question
Is the sale of the following products by you GST-free supplies: blood glucose meters, test strips, skin pricking devices and control solution?
Answer
The sale of the products mentioned above (except for the control solution) are a GST-free supplies. However the sale of the control solution is not GST-free and will be taxable where the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are met.
Relevant facts and circumstances
You are currently selling products for use by sufferers of diabetes
The products are blood glucose meters, test strips, lancing devices (skin pricking) and control solution
The products are specifically designed for people with an illness or disability, and are not widely used by people without an illness or disability
The control solution is used to cleanse the glucose meters. It is not a drug or medicinal preparation
You and the recipient of the items have not agreed that the supply not be treated as a GST-free supply
You are registered for GST.
Reasons for decision
Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances is GST-free where the medical aid or appliance:
n is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)
n is specifically designed for people with an illness or disability, and
n is not widely used by people without an illness or disability.
The first requirement to be satisfied for an item to be GST-free under subsection 38-45(1) of the GST Act is for it to be covered under Schedule 3 to the GST Act.
Diabetes management products listed in Schedule 3 to the GST Act are:
n finger prickers
n alcohol skin wipes
n test strips
n needles and syringes
n glucose monitors.
The items you supply are all listed in Schedule 3 of the GST Act, except for the control solution.
The supply of the items, other than the control solution, satisfies the requirements of subsection 38-45(1) of the GST Act, and is therefore GST-free. The control solution is not a drug or medicinal preparation. It is not GST-free under either section 38-45 of the GST Act (medical aids or appliances) or section 38-50 of the GST Act (drugs or medicinal preparations).
The supply of the control solution will be taxable where the requirements of section 9-5 of the GST Act are met. The requirements of section 9-5 of the GST Act are:
n The supply is made for consideration
n The supply is made in the course or furtherance of your enterprise
n The supply is connected with Australia
n You are registered for GST.