Edited version of your written advice

Authorisation Number: 1012693236876

Ruling

Subject: Importation of medical aids and appliances

Question 1

Is the importation of the medical aid, including skis specifically designed or manufactured for medical aids (attached or unattached but imported as one unit), a non-taxable importation under section 13-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes

Question 2

Is the importation of medical aids, excluding skis, a non-taxable importation under section 13-10 of the GST Act?

Answer

No

This ruling applies for the following periods:

From 1 July 2014

The scheme commences on:

Unknown

Relevant facts and circumstances

• You are registered for GST.

• All of your clients are in wheelchairs.

• You are importing a medical aid from an overseas supplier for sale in Australia.

• The manufacturer of the medical aid provides adaptive sports equipment.

• The medical aid (when fully constructed) has the following parts and features:

• Feature 1

• Feature 2

• Feature 3

• Feature 4

• Part 1,

• Part 2

• Part 3

• Part 4

• Part 5

• The medical aid is designed to be used on snow with skis. Skis other than those supplied with the product can also however be mounted and used.

• A few of your clients prefer to fit their own skis, which they will source in Australia.

• The medical aid (when fully constructed) is specifically designed to be used as a ski carriage for people with disabilities.

• The Medical aid is only used by people with a disability and is therefore not widely used by people without an illness or disability.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 13-10

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-45(1)

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-45(2)

A New Tax System (Goods and Services Tax) Act 1999 Part 3-2

A New Tax System (Goods and Services Tax) Act 1999 Section 42-5

A New Tax System (Goods and Services Tax) Act 1999 Schedule 3, Item 105

Customs Tariff Act 1995

Reasons for decision

Issue 1

Question 1

Summary

The importation of medical aids, including skis specifically designed or manufactured for medical aids (attached or unattached but imported as one unit), is a non-taxable importation because the supply would be GST-free under subsection 38-45(1) of the GST Act if it was supplied in Australia.

Detailed reasoning

Under section 13-10 of the GST Act, an importation is a non-taxable importation if:

(a) it is a non-taxable importation under Part 3-2 of the GST Act (which contains only one Division, that is, Division 42 of the GST Act), or

(b) it would have been a supply that was GST-free or input taxed if it had been a supply.

Part 3-2 of the GST Act, particularly section 42-5 of the GST Act, deals with the importation of goods that are non-taxable importations in accordance with the Customs Tariff Act 1995. As the Australian Customs and Border Protection Service (Customs) administers this Act, the ATO cannot provide you with any advice on this matter. You will need to contact Customs on 1300 363 263 for more information.

An importation will be a non-taxable importation to the extent that, had it been a supply, the supply would have been a GST-free or input taxed supply. Relevantly, what needs to be determined is whether the importation of the medical aid, either with skis attached to the product or with skis supplied with the product, is a non-taxable importation that would have been GST-free if it had been a supply.

There are no provisions in the GST Act that would make a supply of medical aid an input taxed supply.

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 the table in Schedule 3 to the GST Act or specified in the table in Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations), and

• it is specifically designed for people with an illness or disability, and

• it is not widely used by people without an illness or disability.

A medical aid or appliance must meet all three elements of subsection 38-45(1) of the GST Act to be GST-free.

Item 105 in the table in Schedule 3 to the GST Act (Item 105) lists 'wheelchairs, motorised wheelchairs, scooters, tricycles, spinal carriages and other goods for the carriage of people with disabilities'.

'Carriage', as defined in the Macquarie Dictionary, means the following:

1.  a wheeled vehicle for conveying persons…

…

3.  a wheeled support…

4.  a part, as of a machine, designed for carrying something

5.  manner of carrying the head and body…

6.  the act of transporting…

…

Wheelchairs, motorised wheelchairs, scooters and tricycles are all products which contain wheels, enabling the transport and therefore the carriage of people. Medical aid, including skis specifically designed or manufactured for medical aid (attached, or unattached and then later attached to medical aid, but imported as one unit) enables the transport and therefore the carriage of people on snow. Further, it has been specifically designed for persons with an illness or disability and is not widely used by people without an illness or disability.

Based on the information provided, the supply of medical aids, including skis specifically designed or manufactured for medical aids (attached or unattached but imported as one unit), is therefore covered by Item 105, as it is considered to be 'other goods for the carriage of people with disabilities'. Accordingly, all of the requirements of subsection 38-45(1) of the GST Act are satisfied and therefore, the supply of medical aids, including skis specifically designed or manufactured for medical aids (attached or unattached but imported as one unit), will be GST-free.

Similarly, any spare parts that are imported for medical aids if imported with skis specifically designed or manufactured for medical aid (attached or unattached but imported as one unit), would be GST-free under subsection 38-45(2) of the GST Act.

The importation of medical aids, including skis specifically designed or manufactured for medical aids (attached or unattached but imported as one unit), therefore satisfies the requirements of a non-taxable importation because had it been a supply, the supply would have been a GST-free supply under subsection 38-45(1) of the GST Act.

Question 2

Summary

The importation of medical aids, excluding skis, is a taxable importation because the supply would not be GST-free under subsection 38-45(1) of the GST Act if it was supplied in Australia.

Detailed reasoning

As discussed previously, a medical aid or appliance must meet all three elements of subsection 38-45(1) of the GST Act to be GST-free.

Although medical aids has been specifically designed for persons with an illness or disability and is not widely used by people without an illness or disability, if supplied without skis, the transport and therefore the carriage of people on snow is not possible.

The supply of medical aids, excluding skis, is therefore not covered by Item 105, as it is not a wheelchair, motorised wheelchair, scooter, tricycle, spinal carriage or other goods for the carriage of people with disabilities. It is also not any other medical aid or appliance as listed in Schedule 3 to the GST Act or in the GST Regulations.

Accordingly, subsection 38-45(1) of the GST Act has not been met and therefore, the supply of medical aids, excluding skis, will not be GST-free.

Similarly, any spare parts that are imported for medical aids (if imported excluding skis) would not be GST-free.

The importation of medical aids, excluding skis, therefore does not satisfy the requirements of a

non-taxable importation because had it been a supply, the supply would not have been a GST-free supply under subsection 38-45(1) of the GST Act.