Edited version of private advice

Authorisation Number: 1051776520665

Date of advice: 4 November 2020

Ruling

Subject: GST status of a medical appliance

Question 1

Are your supplies of the medical appliance GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, your supplies of the medical appliance are GST-free supplies under subsection 38-45(1) of the GST Act.

Question 2

Are your importations of the medical appliance non-taxable importations under paragraph 13-10(b) of the GST Act?

Answer

Yes, your importations of the medical appliance are non-taxable importations under paragraph 13-10(b) of the GST Act.

Relevant facts and circumstances

You are registered for the goods and services tax (GST).

You import and sell a medical appliance.

The appliance is a medical device for children and adults with disabilities.

The appliance has a maximum working load.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 13-10(b)

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

Reasons for decision

All legislative references are to the GST Act unless otherwise specified.

Question 1 GST-free supplies

All references are to the GST Act unless otherwise specified.

Under subsection 38-45(1), the supply of a medical aid or appliance is GST-free where the medical aid or appliance is:

•         covered by Schedule 3 or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)

•         specifically designed for people with an illness or disability, and

•         not widely used by people without an illness or disability.

All the above requirements must be satisfied for the supply of a medical aid or appliance to be GST-free. A medical aid or appliance that is GST-free under subsection 38-45(1) will be GST-free all the way down the supply chain and not only when supplied to a person with an illness or disability.

The first requirement is that the medical aid or appliance must be listed in the table in Schedule 3 or in the table in Schedule 3 to the GST Regulations.

Item 121 in the table in Schedule 3 (Item 121) lists 'toilet supports'. A toilet support is an aid or appliance that has design characteristics such that it assists a person with a disability when they are using a toilet. In addition, generally it must be able to support the weight of the person with a disability.

The medical appliance assists a person with a disability using a toilet and supports the weight of the person.

As such, we consider that the medical appliance is covered by Item 121.

The second and third requirements are that the medical aid or appliance must be specifically designed for people with an illness or disability and not widely used by people without an illness or disability. We consider the medical appliance is clearly specifically designed for people with an illness or disability and not widely used by people without an illness or disability. As such, it meets the second and third requirements.

As all the requirements in subsection 38-45(1) are satisfied, you are making a GST-free supply under subsection 38-45(1) when you supply the medical appliance.

Question 2 Non-taxable importations

Under paragraph 13-10(b), an importation is a non-taxable importation if, had the importation been a supply (made in Australia), the supply would have been GST-free or input taxed.

As your supplies of the medical appliance are GST-free under subsection 38-45(1), your importations of the medical appliance are non-taxable importations under paragraph 13-10(b).