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Edited version of your written advice
Authorisation Number: 1051179707671
Date of advice: 11 January 2017
Ruling
Subject: Goods and Services Tax (GST) and sales of home care devices
Question 1
Is the sale of your home care device (the product) GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No, the sale of the product is not GST-free under section 38-45 of the GST Act.
This ruling applies for the following periods:
1 July 20XX to 30 June 20ZZ
Relevant facts and circumstances
You are registered for GST.
You carry on an enterprise of supplying health devices and products.
You supply the product within Australia.
You provided brochures for the product which state that the product:
● is an alarm designed to bring innovative solutions for the growing population of seniors that live independently at home, giving them extra confidence with advanced emergency alerting capabilities that include voice recognition and fall detection technologies.
● constantly learns and adapts to the daily behaviour of individuals and provided alerts with different severity levels based on deviation from daily routine. These personalised real time alerts enable timely prevention of possible deterioration in the senior's wellbeing.
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 subsection 38-45(1)
A New Tax System (Goods and Services Tax) Act 1999 section 195-1
A New Tax System (Goods and Services Tax) Act 1999 Schedule 3
A New Tax System (Goods and Services Tax) Act 1999 Schedule 3, Item 33
Reasons for decision
Under section 9-5 of the GST Act 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
(c) the supply is connected with the indirect tax zone; and
(d) 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.
Medical aids and appliances
Subsection 38-45(1) of the GST Act provides that a supply of medical aid and appliances is GST-free if it is:
● covered by Schedule 3 to the GST Act (Schedule 3) or specified in the GST regulations; and
● specifically designed for people with an illness or disability; and
● not widely used by people without an illness or disability.
Item 33 in the table in Schedule 3 specifies '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 that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment.
On the information provided, your product fits the category of 'medical alert' devices as it monitors the daily habits of the individual and alerts for medical attention where there is deviation from the normal daily routine.
The information you provided also shows that your product is primarily marketed for the growing population of seniors who wish to live independently at home. Seniors are not necessarily people with an illness or disability. There is no evidence that the product has been specifically designed for people with an illness or disability. It also cannot be said that the product is not widely used by people without an illness or disability. This means the sale of your product is not GST-free.
Taxable supply
You are selling your product for a monetary amount so there is consideration for its supply.
Section 195-1 defines indirect tax zone to mean Australia and as the sale of your product occurs in Australia, the supply is connected with the indirect tax zone.
You are registered for GST and you carry on enterprise of supplying health devices and products. Thus, the sale of this product is made in the course or furtherance of an enterprise that you carry on.
Therefore, the sale of this product satisfies all the criteria of section 9-5 of the GST Act, and is a taxable supply. There are no other provisions of the GST Act that would result in your supply of this product being GST-free or input taxed, and as such, the supply of this product is taxable.