Edited version of private advice

Authorisation Number: 1051894360365

Date of advice: 2 September 2021

Ruling

Subject: GST - medical aids and appliances

Question

Is the supply of the products listed below 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 products listed below are GST-free under subsection 38-45 of the GST Act.

Section 38-45 of the GST Act states:

38-45 Medical aids and appliances

(1) A supply is GST-free if:

(a)  it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and

(b)  the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.

All the products listed below meet the requirements of subsection 38-45(1) of the GST Act and therefore are GST-free.

List of products:

•         Resting ECG machines (traditional ECG "white box" products)

•         Resting ECG with spirometry

•         Cardiac stress testing system

•         Holter analysis system

•         Software and Acquisition modules

­   The supply of these products constitutes software and a specifically designed wired or wireless data acquisition module or a Digital Holter Recorder. The software cannot be used as a standalone product.

This ruling applies for the following periods:

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

2 September 20XX

Relevant facts and circumstances

You are an Australian resident company.

You are a distributor of medical device products and is registered for GST.

You sell your products to several customers all of whom are registered for GST.

The products are administered by Health Care Practitioners with the relevant qualifications and technical knowledge, on and for the benefit of their patients.

The products are used in hospitals, doctor surgeries or heart specialist rooms.

The relevant products are listed below.

Resting Electrocardiograph ("ECG") with optional Spirometry

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The standard ECG model has a separate optional component that allows a medical professional to use a Spirometry lung function device (cables, mouth pieces etcetera) as part of the heart monitor. The additional functionality can be added on acquisition or as a customisation at a later date.

•         The ECG machine connects to the patient via a wired acquisition module.

Resting ECG 1

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine connects to the patient via a wired or wireless acquisition module.

Resting ECG 2

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine connects to the patient via a wired or wireless acquisition module.

Resting ECG 3

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine connects to the patient via a wired or wireless acquisition module.

Resting ECG 4

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine connects to the patient via a wired or wireless acquisition module.

Diagnostic Cardiology Suite

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine is PC based (differing from the traditional ECG "white box" products noted above) and connects to the patient via a wired or wireless acquisition module.

•         Alternatively, the product is supplied in the form of software and the wired or wireless acquisition module (to cater for customers that have their own computer infrastructure).

•         The software cannot be used for any other purpose and is required to be used in conjunction with the wired or wireless acquisition module otherwise it does not operate.

•         The software will not accept data from alternative data acquisition modules or manual input.

•         The computer software analyses the data recorded as part of the interpretation functionality producing a report that enables a medical specialist to make a formal diagnosis.

Cardiac Stress Testing System

•         It is used to monitor a patient's heart rate and rhythm during an exercise test and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine is PC based (differing from the traditional ECG "white box" products) and connects to the patient via a wired or wireless acquisition module.

•         When supplied as a turnkey product, it encompasses the PC, software and relevant acquisition module.

•         Alternatively, the product is supplied in the form of software and the wired or wireless acquisition module (to cater for customers that have their own computer infrastructure).

•         The software cannot be used for any other purpose and is required to be used in conjunction with the wireless acquisition module.

•         The software will not accept data from alternative data acquisition modules or manual input.

•         The computer software analyses the data recorded as part of the interpretation functionality producing a report that enables a medical specialist to make a formal diagnosis.

•         The equipment can be connected to specific devices (example medical treadmills) to assist the medical professional with testing the heart rhythm during an exercise test.

Holter Analysis System

•         It is used to monitor a patient's heart rate and rhythm and is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

•         The ECG machine is PC based (differing from the traditional ECG "white box" products) and works in conjunction with a Digital Holter Recorder which is worn by a patient.

•         The ECG machine can be used with a number of Digital Holter Recorders enabling the healthcare provider to treat multiple patients. All recorders are connected to the same software enabling multiple testing and monitoring to be conducted at the same time.

•         When supplied as a turnkey product, it encompasses the PC, software and the Digital Holter Recorder.

•         Alternatively, the product is supplied in the form of software and the Digital Holter Recorder (to cater for customers that have their own computer infrastructure).

•         The software cannot be used without the Digital Holter Recorder and the Digital Holter Recorder cannot be used without the software.

•         The software cannot be used for any other purpose and is required to be used in conjunction with the wireless acquisition module.

•         The software will not accept data from alternative data acquisition modules or manual input.

•         The computer software analyses the data recorded as part of the interpretation functionality producing a report that enables a medical specialist to make a formal diagnosis.

•         This system is generally utilised when a patient is active and going about their daily business and ongoing monitoring is required. In these circumstances, the patient must have unrestricted movement which is not possible if they are required to hold the monitor.

•         The Digital Holter Recorder is used with a carry case/clip to hold the device in place when it is worn such that a patient has unrestricted movement and therefore appropriate testing is achieved. Without the carry case/clip the Digital Holter Recorder would need to be held by the patient thus rendering the testing flawed and ineffective. As such, the case/clip in this regard is integral to the performance of the ECG machine.

•         A Digital Holter Recorder is provided as part of the product; however, it is also available to be purchased in its own right. This enables multiple patients to be monitored at once; however, it can only be used with the respective software.

•         Whilst the Digital Holter Recorder is used by patients in their everyday life (i.e. the location is wherever the patient is), the information collected by and on the device is unable to be downloaded, read, and/or analysed on its own and therefore, the patient is required to return to their relevant hospital, doctor surgery or heart specialist room in order to facilitate the collection and transmission of this data by a Health Care Practitioner.

The software in all the relevant models is not provided separately under a license agreement from a software provider.

You have not entered into agreements with its customers to deliberately classify the products as being subject to GST.

Relevant legislative provisions

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