Edited version of private ruling

Authorisation Number: 1011771680586

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

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

Question

Is the supply of the specified device to a customer for medical reasons, GST-free under section 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No. The supply of the device will not be GST-free even when it is supplied to a person with an illness or disability. The supply will be taxable under section 9-5 of the GST Act.

Relevant facts and circumstances

You are registered for GST.

You are a supplier of the device.

You will be supplying the device at a private residence for one of your customers.

Your customer has a medical condition and has provided you with a copy of a letter from a medical practitioner to verify this. This letter also recommends that due to the medical condition, your customer would benefit from having the device in their home.

Your customer is purchasing the device due to the medical condition.

Your customer has sought advice from the Australian Taxation Office and has provided you with a copy of this general guidance advice.

You now request a ruling on whether the device can be supplied to your customer GST-free.

You advised that the device complies with the relevant Australian Standard. You have provided a copy of the confirmation that the device complies with the Australian Standard.

The Australian Standard specifies requirements for these devices that are installed in private residences. These devices are not specifically designed for people with disabilities.

Your website in Australia has details on this product.

You have provided a copy of the product brochure which provides the features in detail and the technical specifications of the device. The specifications provide that the device is for private home use only. The product brochure provides that the device is specifically designed for residential use for both new and existing homes and has features and design for all to enjoy.

Reasons for decision

Detailed reasoning

GST is payable on taxable supplies. Section 9-5 of the GST Act 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 the GST Act)

Based on the information provided, the supply of the device satisfies the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the device for consideration, in the course of your enterprise (business), the supply is connected with Australia as the goods are made available in Australia, and you are registered for GST.

The supply of the device is not input taxed under any provisions of the GST Act or any other Act. Therefore, what is left to be considered is whether the supply of the device is 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 table in Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations),

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

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

Schedule 3 to the GST Act and the GST Regulations contain a list of medical aids and appliances which are generally used by people with various illnesses or disabilities. However, Schedule 3 to the GST Act and the GST Regulations do not operate in isolation to make the listed items GST-free. The supply of any item listed in Schedule 3 to the GST Act or the GST Regulations as medical aids or appliances will need to satisfy all the requirements in subsection 38-45(1) of the GST Act before it will be GST-free. That is the listed medical aids and appliances must be specifically designed for people with an illness or disability and must not be widely used by people without an illness or disability.

Additionally, subsection 38-45(3) of the GST Act provides that a supply is not GST-free if the supplier and the recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies.

Manual, electric, ceiling track or pool hoist specifically designed for people with disabilities

Item 88 in the table in Schedule 3 (Item 88) lists 'manual, electric, ceiling track or pool hoists specifically designed for people with disabilities'.

The ordinary meaning of hoist as defined in the The Macquarie Dictionary, 1997, 3^rd edn, the Macquarie Library Pty Ltd New South Wales is:

4. an apparatus for hoisting, as a device.

5. a device for heavy goods: goods device.

While the devices that are normally covered by item 88 would be those devices that are used to device an individual and transfer them, for example, from a bed to a wheelchair or from a wheelchair into a pool, it is considered that the ordinary meaning of hoist is capable of covering devices. In coming to our decision, we have taken into consideration the relevant ATO Interpretative Decision.

However, item 88 restricts the devices to those which are specifically designed for people with disabilities.

Is the supply of the device a GST-free supply of a medical aid or appliance?

To be covered by item 88 and also to satisfy the second requirement in subsection 38-45(1) of the GST Act, the device must be specifically designed for people with disabilities.

Some devices are specifically designed for people with disabilities. The Australian Standards in relation to devices have parts which relate to people with limited mobility. Devices complying with relevant Australian Standards are also intended to be used primarily by people with limited mobility. As such these devices are covered by item 88 as these devices are specifically designed for people with disabilities. However, general purpose passenger devices with additional facilities for people with disabilities such as Braille information and lower buttons which are accessible by people in wheelchairs are not covered by item 88 as these devices are not specifically designed for people with disabilities.

In this case you have advised that your device complies with the relevant Australian Standard. It is a single private residential device which is not specifically designed for people with a disability. Although having features for those with special needs they also have features that are of benefit to those without an illness and disability, and as such they are not covered by item 88. This means that the first and second requirements in subsection 38-45(1) of the GST Act are not satisfied.

There are no other items listed in Schedule 3 to the GST Act, or specified in the table in Schedule 3 to the GST Regulations that cover the device. As such the supply of this device is not GST-free under subsection 38-45(1) of the GST Act but rather, taxable under section 9-5 of the GST Act.

The GST status of a device that complies with the relevant Australian Standard remains taxable even if it is supplied to a person with an illness or disability.