Edited version of your written advice

Authorisation Number: 1012879733056

Date of advice: 18 September 2015

Ruling

Subject: GST and stairway evacuation chairs

Questions

1. Is the supply of the goods and the spare parts that are specifically designed for those goods GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

2. Is the importation of the goods and the spare parts that are specifically designed for those goods a non-taxable importation under subsection 13-10(b) of the GST Act?

Answers

1. Yes.

2. Yes

Relevant facts and circumstances

You are registered for GST.

You are carrying an enterprise of manufacturing and selling goods.

The goods are specifically designed to enable wheelchair users or less mobile people to be transported quickly and safely in the event of emergency. They are not widely used by people without an illness or disability.

You intend to import and supply the goods in the indirect tax zone.

You will also supply spare parts that are specifically designed for the goods.

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 13-5

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

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decisions

1. GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states:

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and

(a) the supply is *connected with the *indirect tax zone; and

(b) you are *registered, or *required to be registered.

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

(*denotes a term defined under section 195-1 of the GST Act).

Based on the information provided, you will supply the goods for consideration and in the course of carrying on your enterprise. The supply will be connected with the indirect tax zone as you will import the goods and make them available to the recipients in the indirect tax zone. Furthermore, you are registered for GST. Thus, the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act will be satisfied. Accordingly, your supply of the goods is a taxable supply unless the supply is GST-free or input taxed.

Subsection 38-45 (1) of the GST Act provides that 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.

Paragraph 38-45(1)(a) - covered by Schedule 3

Item 105 of 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 as specified medical aids and appliances for the purpose of paragraph 38-45(1)(a) of the GST Act.

The goods are used to transport wheelchair users and those who are less mobile in the event of emergency. As such, the goods are covered by item 105. The requirement in paragraph

38-45(1)(a) of the GST Act is satisfied.

Paragraph 38-45(1)(b) - specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability

A medical aid and appliance is specifically designed for people with an illness or disability if it is created with the intention of having certain features or characteristics that would be of benefit to the people with an illness or disability.

In determining whether the products are used by people without an illness or disability reference should be made to how the wider community uses these goods. That is, the common purpose for which the goods are purchased.

Subsection 38-45(1) of the GST Act does not require the GST treatment of a medical aid and appliance to be determined by reference to the actual use for which an item is being purchased but rather focuses on the purpose for which the wider community purchases the product.

In this case, the purpose of the goods is to enable wheelchair users and less able bodied people to be transported quickly and safely in the event of emergency. As such, it is considered that the goods are specifically designed for people with an illness or disability, and are not widely used by people without an illness or disability. The requirement in paragraph 38-45(1)(b) of the GST Act is also satisfied.

Therefore, your supply of the goods is GST-free under subsection 38-45(1) of the GST Act.

It should be emphasised that items which are GST-free under subsection 38-45(1) of the GST Act are GST-free at all points in the supply chain unless the supplier and the recipient agree that the supply not be treated as GST-free.

Spare Parts

Subsection 38-45(2) of the GST Act provides that a supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing the supply of which would be GST-free under subsection 38-45(1) of the GST Act.

As discussed above, the supply of the goods is GST-free under subsection 38-45(1) of the GST Act. Accordingly, the supply of spare parts that are specifically designed for those goods is GST-free unless you and the purchaser agree not to treat the supply as GST-free.

2. According to section 13-5 of the GST Act, you make a taxable importation if:

(a) goods are imported; and

(b) you enter the goods for home consumption (within the meaning of the Customs Act 1901).

However, the importation is not a taxable importation to the extent that it is a non-taxable importation.

In this case, the goods will be imported; and, as the importer, you will enter them for home consumption. As paragraphs 13-5(a) and 13-5(b) of the GST Act are satisfied, you are making a taxable importation when you import the goods unless the importation is a non-taxable importation.

Section 13-10 of the GST Act provides that an importation is a non-taxable importation if:

(a) it is a non-taxable importation under Part 3-2 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.

The supply of the goods and the spare parts that are specifically designed for those goods is GST-free under section 38-45 of the GST Act. Therefore, if the importation of the goods and the spare parts had been a supply, it would have been a supply that was GST-free. Accordingly, the importation is a non-taxable importation under paragraph 13-10(b) of the GST Act.

You, as the importer, will not be making a taxable importation under section 13-5 of the GST Act.