Edited version of private ruling

Authorisation Number: 1011795075710

NOTICE:

This private ruling was revised following issue. This edited version has therefore been replaced with the edited version of the private ruling with the authorisation number of 1051312366858.

Ruling

Subject: GST and medical aids and appliances

Question

What is the goods and services tax (GST) treatment of medical aids and appliances that you are to supply (by way of sale and hire)?

Answer:

Those medical aids and appliances satisfying the requirements of subsection 38-45(1) of the A New Tax System (Goods and services Tax) Act 1999 (GST Act) will be GST-free when sold or hired.

Relevant facts and circumstances

You are registered for GST.

You are to supply medical aids and appliances.

You do not have an agreement with your customer that the supply of the medical aids and appliances will not be GST-free.

Relevant legislative provisions

GST Act

Section 38-45 with reference to Schedule 3.

A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)

Schedule 3.

Reasons for decision

Summary

Those medical aids and appliances satisfying the requirements of subsection 38-45(1) of the GST Act will be GST-free when sold or hired.

Detailed reasoning

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

● covered by an item listed in Schedule 3 to the GST Act or in Schedule 3 to the GST Regulations

● specifically designed for people with an illness or disability, and

● not widely used by people without an illness or disability.

Hence, your medical aid or appliance will be GST-free when it satisfies the requirements of section 38-45(1) of the GST Act.

Installation of medical aids and appliances

Some medical aids and appliances covered by Schedules 3 of the GST Act and GST Regulations require installation or attachment to a building in order to function in the capacity for which they are designed. In making supplies of such medical aids and appliances, the supplier may choose to build the aid or appliance in situ, or to purchase a pre-fabricated aid or appliance and on-sell that aid or appliance to the end-consumer. In the second scenario, the supplier may offer an optional installation service.

There are no legislative provisions in the GST Act or any other Act that allow the installation of a medical aid or appliance to be GST-free. Hence, it is considered that where an item is identifiable as a medical aid or appliance before being installed, any charge made in respect of the installation of that medical aid or appliance is taxable.

However, where a GST-free aid or appliance is built up in situ from various components to form part of the structure of a building (such as a wheelchair ramp), the supply of that installed aid or appliance is GST-free, including any charge for the installation. The reason for this is that the medical aid or appliance does not become identifiable as such until completed.

Customised modifications

Item 18 of Schedule 3 of the GST Regulations allows customised modifications to be made to the medical aids and appliances listed from Items 111 to 121 of Schedule 3 of the GST Act to be GST-free. These medical aids and appliances are as follows:

● bath boards or toilet seats

● bath supports

● shower chairs or stools

● shower supports

● shower trolleys

● mobile shower chairs

● commodes

● commode cushions

● commode pans

● toilet frames, and

● toilet supports.

Hire of equipment

The GST Act does not stipulate that the medical aid or appliance must be purchased for it to be GST-free. Hence, any medical aid or appliance that is GST-free when sold is also GST-free when hired.