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Edited version of your private ruling
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Ruling
Subject: GST and the supply of Xxx as a GST-free medical aid and appliance
Question
Will your supply of Xxx be GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No, your supply of Xxx will not be GST-free under subsection 38-45(1) of the GST Act.
Relevant facts and circumstances
You are an importer and supplier of products and are registered for GST.
One of the items that you import and supply is Xxx, which is a treatment for zzz.
Xxx is a medical device.
There are two current mainstream treatments of for this condition.
You also referred us to your website.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Ch3-Pt3-1-Div 38.
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-45.
A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-45(1).
A New Tax System (Goods and Services Tax) Act 1999 Schedule 3.
A New Tax System (Goods and Services Tax) Regulations 1999.
Reasons for decision
In considering whether a supply is subject to GST, regard must be had to section 9-5 of the GST Act which provides:
You make a taxable supply if:
(a) you make the supply for consideration
(b) the supply is made in the course or furtherance of an enterprise that you carry on
(c) the supply is connected with Australia, and
(d) you are registered, or required to be registered for GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
Therefore, where the requirements of paragraphs (a) to (d) of section 9-5 are satisfied, you will be liable for GST on supplies you make unless the supply is GST-free or input taxed.
It is considered that the provisions of the GST Act dealing with input taxed supplies will have no application in relation to the supplies you have identified.
In determining whether the supplies are GST-free, Division 38 of the GST Act needs to be considered.
Section 38-45 of the GST Act identifies the circumstances in which a supply of medical aids and appliances is GST-free. It essentially has three elements, all of which must be satisfied before the supply can be GST-free. It must be:
§ listed in Schedule 3 or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)
§ specifically designed for people with an illness or disability, and
§ not widely used by people without an illness or disability.
Items which are GST-free under subsection 38-45(1) of the GST Act are GST-free at all points in the supply chain from the point in time that they become the item listed in Schedule 3 and not only when supplied to a person who has an illness or disability.
Xxx is not specified in the GST Regulations.
We examined the items in the table of Schedule 3 of the GST Act that are considered medical aid and appliances.
We now have to consider whether your product fits into one of the items in the table in order to meet the first criterion of subsection 38-45(1) of the GST Act.
After examining the facts, Xxx does not meet the criteria of the items in the table of Schedule 3 of the GST Act.
Therefore, Xxx does not meet the first requirement of subsection 38-45(1) of the GST Act and will not be GST-free. Accordingly, we will not need to consider the other requirements of the section 38-45 of the GST Act.
As you are registered for GST and the supply of Xxx will meet all the other requirements of section 9-5 of the GST Act, the supply of Xxx in Australia will be a taxable supply.