Edited version of your written advice

Authorisation Number: 1051363226132

Date of advice: 20 April 2018

Ruling

Subject: GST: supply and installation of tactiles

Question

Will your supply and installation of tactiles (also known as tactile ground surface indicators) be a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You supply and install tactiles (also known as tactile ground surface indicators).

Tactile ground surface indicators are small round tiles which are installed on footpaths, bus stops, walkways, etc. They are used to aid a visually impaired person to identify variations or hazards such as roadways, stairways, traffic lights and pedestrian crossings.

The tactile ground surface indicators are supplied to you as a GST exempt supply.

The tactile ground surface indicators do not have an application other than to alert the visually impaired. As such, the tactile ground surface indicators are not widely used by people without an illness or disability.

You supply and install the tactile ground surface indicators in one transaction. The transaction is recorded on one invoice.

There is no agreement between you and the recipient of the supply that the supply will not be treated as a GST-free supply.

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 9-80

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

Reasons for decision

Under section 9-5 of the GST Act, you make a taxable supply if:

● you make the supply for consideration, and

● the supply is made in the course or furtherance of an enterprise that you carry on; and

● the supply is connected with the indirect tax zone; and

● 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.

Under subsection 38-45(1) of the GST Act, the supply of a medical aid or 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 151 in the table in Schedule 3 (Item 151) lists ‘auditory/tactile alerting devices’. The phrase ‘auditory/tactile alerting devices’ is not defined in the GST Act. It is therefore appropriate to examine the ordinary meaning of that phrase.

The Macquarie Dictionary [Online] defines ‘auditory’ to mean ‘relating to hearing, to the sense of hearing…’, ‘tactile’ to mean ‘1. of or relating to the organs or sense of touch; endowed with the sense of touch. 2. perceptible to the touch…’ and ‘alert’ to mean ‘… 4. an alarm or warning…’

Accordingly, an auditory/tactile alerting device is a device which is designed to alert a visually impaired person to a presence, occurrence or danger through the person’s sense of touch or hearing.

The tactiles you supply and install have a distinct raised surface and are used both inside and outside of buildings as tactile ground surface indicators. The tactiles alert visually impaired people to potential hazards such as the presence of stairs or the need to change direction to avoid danger. Therefore, the tactile ground surface indicators are considered a tactile alerting device and are covered by Item 151.

The tactile ground surface indicators are specifically designed for people with a visual impairment and are not widely used by people without an illness or disability. As a result, the supply of tactile ground surface indicators meets the requirements of subsection 38-45(1) of the GST Act and is GST-free.

As explained in ATO Interpretative Decision ATO ID 2005/80 Goods and Services Tax – GST and supply of Braille overlay for existing sign where the supply of GST-free medical aids/appliances is supplied in one transaction which also includes labour components (such as installation of the medical aid/appliance), the GST treatment of the transaction will depend on how the supply is characterised. It will either be:

1. a supply of a GST-free medical aid/appliance, to which the labour is integral, ancillary or incidental (which is treated entirely as a GST-free supply of a GST-free medical aid/appliance), or

2. a supply of labour, to which the supply of the GST-free medical aid/appliance is integral, ancillary or incidental (which is treated entirely as a taxable supply of labour), or

3. a supply in which neither the supply of the GST-free medical aid/appliance nor the supply of the labour is integral, incidental or ancillary to the other but are separately identifiable supplies. In such a case, there is a supply which is partly taxable and partly GST-free. Under section 9-80 of the GST Act, the consideration received for the supply must be apportioned, and GST levied only on the consideration relating to the taxable part of the supply (that is, the labour component).

The substance of your supply is the tactile ground surface indicators. The attachment of the tactile ground surface indicators to a building or fixture or attached to other property is necessary for the tactile ground surface indicators to be used for the function for which they are designed.

The labour involved in attaching the tactile ground surface indicators is incidental to the supply of the tactile ground surface indicators, therefore forms part of the GST-free supply of the tactile ground surface indicators under subsection 38-45(1) of the GST Act.