Edited version of private advice

Authorisation Number: 1051797934418

Date of advice: 19 January 2021

Ruling

Subject: Goods and services tax - medical aids and appliances

Question

Is the supply of the medical aid and appliance (Product) GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, the supply of the Product is GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Relevant facts and circumstances

You are a supplier of medical aids and appliances including the Product.

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

Relevant legislative provisions

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

A New Tax System (Goods and Services Tax) Regulations 2019 Section 38-45.01

Reasons for decision

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

•         it is covered by Schedule 3 to the GST Act, or specified in the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations),

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

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

The Product is not specifically listed in Schedule 3 to the GST Act.

However, 'infusion pumps' and 'infusion sets' are specified in the table to subsection 38-45.01(1) of the GST Regulations (Item 6) for the purposes of paragraph 38-45(1)(a) of the GST Act.

'Infusion pumps' and 'infusion sets' are not defined in the GST Act or GST Regulations.

Generally, where a phrase is not defined in the relevant Act or regulations, it is interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a phrase has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that phrase relates (Herbert Adams Ltd v. Federal Commissioner of Taxation (1932) 47 CLR 222; (1932) 2 ATD 31).

ATO Interpretative Decision ATO ID 2004/630 gives the meaning of an 'infusion pump' as:

'An infusion pump is a pump that is used in association with an infusion set to deliver a measured dose of medication'

ATO Interpretative Decision ATO ID 2005/295 gives the meaning of an 'infusion set' as:

'An infusion set is a sterile device used for introduction of fluid, including medication or nutrient but excluding blood and blood products, by means other than through the gastrointestinal tract.'

The Product comes within the ordinary meaning of an 'infusion pump' and an 'infusion set' for the purposes of Item 6 in the GST Regulations. While the category heading in Column 2 in the table in subsection 38-45.01(1) of the GST Regulations is not operative, it can assist in interpreting the provision in certain instances including confirming the meaning of the provision or in determining the purpose or object underlying the provision (see subsection 38-45.01(2) of the GST Regulations and section 182-15 of the GST Act). The category heading in Column 2 for Item 6 refers to 'Infusion systems for the delivery of a measured dose of medication'. On that basis, the Product satisfies the first requirement of subsection 38-45(1) of the GST Act.

As the Product is specifically designed to deliver medication to a person with an illness or disability, and by its function is not widely used by people without such an illness or disability, it follows that the second requirement of subsection 38-45(1) of the GST Act that the Product is specifically designed for people with an illness or disability and not widely used by people without an illness or disability is satisfied.

Accordingly, the supply of the Product by you is GST-free under subsection 38-45(1) of the GST Act.