Edited version of private ruling

Authorisation Number: 1011749886132

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Ruling

Subject: GST and medical aid and appliance

Question 1

Is your supply of the chair GST-free?

Answer

Yes, your supply of the chair is GST-free.

Question 2

Is your importation of the chair a non-taxable importation?

Answer

Yes, your importation of the chair is a non-taxable importation.

Relevant facts and circumstances

You are registered for GST.

You intend to import the chair and initially you will sell it to a retailer.

You consider that the chair will only be purchased by people with disabilities, aged care facilities and hospitals and will not appeal to the general public because of the design of the chair.

The chair has the following features:

You have advised that there will be no agreement between you and your customers that the supply of these chairs will not be treated as GST-free supplies.

Reasons for decision

Question 1

Summary

Your supply of the chair is GST-free as a medical aid or appliance.

Detailed reasoning

A supply is GST-free if it is GST-free under Division 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Of relevance to this case is subsection 38-45(1) of the GST Act which provides that the supply of certain medical aids and appliances 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 1999

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

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

(Please note, under subsection 38-45(3) of the GST Act, the supplier and the recipient can agree that the supply will not be treated as GST-free. However, this does not apply in this case.)

Item 86 in the table in Schedule 3 (Item 86) lists 'electrically operated therapeutic lounge/recliner chairs specifically designed for people with disabilities'.

In this case, the chair is an electrically operated reclining chair.

Therefore, the chair is specifically designed for people with disabilities and as such, is covered by Item 86.

Furthermore, we accept that the design of the chair would mean that the chair would not be widely used by people without an illness or disability.

Therefore, as all of the requirements of subsection 38-45(1) of the GST Act have been satisfied, your supply of the chair is GST-free.

It should also be noted that this GST-free status is not dependent on the type of customer to which the chair is sold. That is, your supply of the chair is GST-free regardless of whether it is sold to an individual or a retail outlet.

Question 2

Summary

Your importation of the chair is a non-taxable importation because your subsequent supply of the chair in Australia will be GST-free.

Detailed reasoning

Under Division 13 of the GST Act, GST is payable on a taxable importation. However, an importation is not a taxable importation to the extent that it is a non-taxable importation.

Section 13-10 of the GST Act provides that an importation is a non-taxable importation if:

· it is a non-taxable importation under Part 3-2 of the GST Act (Part 3-2 of the GST Act deals with non-taxable importations with reference to the Customs Tariff Act 1995), or

· it would have been a supply that was GST-free or input taxed if it had been a supply within Australia.

As outlined under Question 1 above, your supply of the chair within Australia is GST-free. Therefore, your importation of this chair is a non-taxable importation under section 13-10 of the GST Act.