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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012443483329

Ruling

Subject: GST and medical aids

Question 1

Is the supply of the device subject to goods and services tax (GST)?

Answer

No.

Relevant facts and circumstances

    · You are registered for GST

    · You are to supply the device which is the latest easy to use, easy to wear device and personal emergency response system for the elderly with chronic disease or the disabled.

    · The devise assists to keep wearers and carers connected in emergency situations.

    · The device is designed for the elderly and the disabled and allows them the freedom to live the life they want with the support they need at home, on holiday or out and about.

    · The device is not widely used by people without a disability.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999t

Section 38-45 with reference to Schedule 3.

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

Schedule 3

Reasons for decision

Summary

The device is covered by Schedule 3 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), hence it is GST-free under subsection 38-45(1) of the GST Act.

Accordingly, the supply of the device is not a taxable supply under section 9-5 of the GST Act and you will not be subject to GST on the supply.

Detailed reasoning

A supply is subject to GST if it is a taxable supply. Section 9-5 of the GST Act provides that 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.

From the information received, you satisfy the requirements in paragraphs 9-5(a) to 9-5(d) of the GST Act when you supply the device.

However, your supply of the device is not a taxable supply to the extent that it is GST-free or input taxed.

There is no provision under the GST Act that makes your supply of the device input taxed. The next step is to determine whether your supply of the device is GST-free.

GST-free supply

Relevant to your supply of the device is section 38-45 of the GST Act.

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

    (a) is covered by Schedule 3 (medical aids and appliances), or specified in the regulations); and

    (b) is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.

Therefore, a medical aid or appliance must meet the above requirements to be GST-free. If the item is not specifically provided for in schedule 3 to the GST Act or schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations), it is not GST-free even if it is similar to items included in the GST Act or GST Regulations.

Once an item meets all the above elements, then its supply will be GST-free all the way down the supply chain, and not only when supplied to a person who has an illness or disability.

Item 33 in the table in Schedule 3 (Item 33) lists 'medical alert devices'. It is considered that a 'medical alert device' is a device that is designed for the purpose of alerting medical/caring personnel or an ambulance service to the fact that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment.

In your case, the device is designed for the purpose of alerting careering personnel that a patient with a medical condition (with resultant physical or mental difficulties) needs immediate assistance. Therefore, the device falls within the meaning of Item 33. Furthermore, the device is designed for people with an illness or disability and is not widely used by people without an illness or disability.

Therefore, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you supply the device.

Accordingly, the supply of the device is not a taxable supply under section 9-5 of the GST Act and you will not be subject to GST on the supply


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