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Edited version of your written advice
Authorisation Number: 1051487200481
Date of advice: 13 March 2019
Ruling
Subject: GST and medical aids and appliances
Question
Is the Device supplied by you GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes, your supply is GST-free under subsection 38-45(1) of the GST Act.
The scheme commences on:
The scheme has commenced
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You have commenced a new agency for the sale of medical equipment and consumables.
You provided description and features of the Device which is extracted from the manufacturer’s website.
The Device has been registered on the Australian Register of Therapeutic Goods as a defibrillator/pacemaker. The intended purpose according to the website is a defibrillator.
The primary purpose of the Device is to monitor the heart and pace of the heart when required and is only used by health care professional in a clinical setting (e.g. hospital or ambulance).
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 Schedule 3
Reasons for decision
All legislative references are made to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) unless otherwise stated.
Under subsection 38-45(1), a supply is GST-free if it is a medical aid or appliance that:
(a) is covered by Schedule 3 to the GST Act or in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations); and
(b) is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.
Item 1 of Schedule 3 (Item 1) lists ‘heart monitor’ as a medical aid and appliance for the purposes of paragraph 38-45(1)(a).
The term ‘hear monitors’ is not defined in the GST Act, thus takes on its ordinary meaning unless the term has a special or technical meaning.
The Stedman’s Medical Dictionary (2000) defines a cardiac (heart) monitor to mean: ‘an electronic monitor which, when connected to the patient, signals each heartbeat with a flashing light, an electrocardiographic curve, an audible signal, or all three’.
As such, it is considered that a device with the primary function of monitoring a patient’s heartbeat is a ‘heart monitor’ and is covered by Item 1 of Schedule 3.
The Device is an automated external defibrillator/defibrillator device where its primary function is to monitor the heartbeat or rhythm of a person and pace its heart when required. It signals each heartbeat with an electrocardiographic curve and alert clinicians of adverse changes for the purpose of deciding whether a defibrillating shock is required. The Device is therefore considered to be a ‘heart monitor’ covered by Item 1. It is also considered that the Device is specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
As such, the Device is a GST-free medical aids and appliances because:
● the primary function of the Device is to monitor a person’s heart and signals heartbeat with an electrocardiographic curve, and
● the Device is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability, and
● you have not entered into agreement with recipient of the Device in question for it not to be treated as GST-free supply.