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Edited version of your private ruling
Authorisation Number: 1012556222367
Ruling
Subject: GST and the supply of a specialised treadmill
Question 1
Is the supply of the use of a specialised treadmill a GST-free supply under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999?
Answer
No, the supply of the use of a specialised treadmill is not GST-free, it is a taxable supply.
Relevant facts and circumstances
The entity operates a business providing the use of a specialised treadmill to client.
The treadmill is designed to give support to patients with various illnesses, injuries or disabilities by reducing the weight borne by the legs of the patient.
The specialised treadmill is becoming more regularly used in the treatment and rehabilitation from injuries and to improve the mobility of people with disabilities.
Clients are generally referred for the specialised treadmill treatment by a doctor of physiotherapist. The entity does not provide health services to clients, nor does it develop treatment plans for the clients.
The entity does not supply health services of a kind listed in either section 38-7 or section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999.
The entity is registered for GST.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5.
A New Tax System (Goods and Services Tax) Act 1999 section 38-7.
A New Tax System (Goods and Services Tax) Act 1999 section 38-10.
A New Tax System (Goods and Services Tax) Act 1999 section 38-45.
Reasons for decision
An entity makes a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if:
· the supply is for consideration; and
· the supply is made in the course or furtherance of an enterprise; and
· the supply is connected with Australia; and
· the supplier is registered, or required to be registered for GST.
However, a supply is not a taxable supply if it is GST-free. The supply of a medical aid or appliance is GST-free under section 38-45 of the GST Act if:
· it is covered by Schedule 3 to the GST Act or is specified in the regulations; and
· the thing supplied is specifically designed for people with an illness or disability;
· and the thing is not widely used by people without an illness or disability.
Schedule 3 to the GST Act contains a list of over 150 specific kinds of medical aids and appliances which may be used by people with various medical conditions. Items 96 - 104 of Schedule 3 relate to medical aids and appliances which are related to the mobility of people with disabilities:
Item |
Category |
Medical aids or appliances |
96 |
Mobility of people with disabilities - physical: walking aids |
crutches |
97 |
walking sticks - specialised | |
98 |
walking frames - standard adult | |
99 |
walking frames - standard child | |
100 |
walking frames - specialised | |
101 |
walking frame modifications | |
102 |
specialised ambulatory orthoses | |
103 |
specialised ambulatory orthosis modifications | |
104 |
quadrupod and tripod walking aids |
None of the items in Schedule 3 can be argued to be of a similar kind to the specialised treadmill. Similarly, none of the items listed in the A New Tax System (Goods and Services Tax) Regulations 1999 are similar to the specialised treadmill.
Consequently, any supplies of the specialised treadmill by the entity are not GST-free supplies of medical aids and appliances under section 38-45 of the GST Act.
The entity supplies the specialised treadmill for consideration (ie payment), it is supplied in the course of an enterprise carried on by the entity, the supply is connected with Australia (because it is located in Australia) and the entity is registered for GST. Therefore, supplies of the specialised treadmill by the entity are taxable supplies under section 9-5 of the GST Act.