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Edited version of private ruling
Authorisation Number: 1011847223939
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Ruling
Subject: GST classification of the sleep product
Question
Is the specified sleeping system a GST-free import?
Answer
No, the sleeping system is not a GST-free import. This means that the sleeping system will attract GST on importation.
Facts
· You are registered for Goods Services Tax (GST), account for GST on a cash basis and report GST quarterly.
· You intend to import a medical product for home consumption.
· The product has been accepted onto the Therapeutic Goods Administration register
· The product is a patented sleeping system intended solely for use by infants.
· The product consists of a portable pad to cradle a young infant during sleep/rest.
· The device consists of two parts.
· The cover is sold separately as a spare, neither parts can be used other than in combination.
· The product is designed to reduce the risk of infant injuries/disorders.
· The product is marketed as a 'sleeping system'.
· Its purpose is to allow a baby to breathe freely through the netting if they roll over.
· You informed us that the sleeping product is preventative in nature and not used for an illness or disability.
Reasons for Decision
Subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) specifies the circumstances in which a supply of medical aids and appliances is GST-free, it states:
(1) A supply is GST-free if:
(a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and
(b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.
Items which do not satisfy all of the above requirements will not be GST-free under subsection 38-45(1) of the GST Act.
In this instance, the sleeping system is not specifically listed in Schedule 3 of the GST Act or specified under regulation 38-45.01 of the A New Tax System (Goods and Services Tax) Regulation.
Furthermore, you informed us that the sleeping system is preventative in nature and is not used for an illness or disability. Therefore, it does not meet the requirements of subsection 38-45(1) of the GST Act.
Subsection 7-1 (1) of the GST Act provides that GST is payable on taxable supplies and taxable importations.
Section 13-15 of the GST Act provides that you must pay the GST payable on any taxable importation that you make.
Therefore, when imported into Australia the sleeping system will be subject to GST.
Note: Your importation of the sleeping system is considered to be a taxable importation; consequently your supply of the sleeping system in Australia will be taxable.