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Edited version of your written advice
Authorisation Number: 1051198417225
Date of advice: 3 March 2017
Ruling
Subject: GST and Medical appliances
Question 1
Are you making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when you supply a Medical machine?
Answer
Yes, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you supply a Medical machine.
Question 2
Are you making a GST-free supply under subsection 38-45(2) of the GST Act, when you supply the spare part for the Medical machine?
Answer
Yes, you are making a GST-free supply under subsection 38-45(2) of the GST Act, when you supply the spare part for the Medical machine.
Relevant facts and circumstances
You are carrying on an enterprise and are registered for GST.
You distribute and sell the machines (MEDICAL) and their spare parts.
The Medical machines send gentle electrical impulses through electrodes attached to pain sites overriding pain signals from reaching the brain.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Subsections 38-45(1) and (2)
Reasons for decision
Question 1
Under subsection 38-45(1) of the GST Act, the supply of a Medical aid and appliance is GST-free where the Medical aid or appliance:
● is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations);
● is specifically designed for people with an illness or disability; and
● is not widely used by people without an illness or disability.
Item 141 in Schedule 3 (Item 141) lists the 'machine' (MEDICAL machine).
The Medical machines you sell send gentle electrical impulses through electrodes attached to pain sites overriding pain signals from reaching the brain. As the Medical machine is a muscle stimulation machine designed for and marketed as a device used for pain relief and management, it is a Medical machine for the purpose of Item 141.
Further the Medical machine is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.
Therefore, the supply of the Medical machine is GST-free under subsection 38-45(1) of the GST Act.
Reasons for decision
Question 2
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 a medical aid or appliance that is GST-free under subsection 38-45(1) of the GST Act; and
● specifically designed as a spare part for a medical aid or appliance that is GST-free under subsection 38-45(1) of the GST Act.
Your products satisfy all the requirements of subsection 38-45(1) of the GST Act. Further the spare parts satisfy all the requirements of subsection 38-45(2) of the GST Act. Therefore, your supply of the spare parts is GST-free.