Edited version of private advice

Authorisation Number: 1052345886166

Date of advice: 20 December 2024

Ruling

Subject: GST - slow speed vertical lift

Question 1

Is the supply of a low rise vertical lift by you to customers Goods and Services Tax (GST) free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer 1

Yes. As all the requirements of subsection 38-45(1) of the GST Act are satisfied, you are making a GST-free supply when you supply lifts to customers that comply with AS 1735.15.

Question 2

Is the installation of a low rise vertical lift by you GST-free under subsection 38-45(1) of the GST Act?

Answer 2

Yes. Where the installation of the lifts is integral, ancillary or incidental to the supply of the lifts, the installation will also be GST-free (provided the installation is also supplied by you and not by a separate entity).

This ruling applies for the following period:

DD Month 202X - DD Month 202X

Relevant facts and circumstances

•                You supply and install electrically powered slow speed vertical lifts.

•                Lifts comply with the Australian Standards AS 1735-15 which are low rise lifts designed for people with limited mobility. They are not automatically controlled.

•                You provided specific information regarding those lifts.

•                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

A New Tax System (Goods and Services Tax) Act 1999 Schedule 3

Reasons for decision

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.

An item will only be GST-free if it meets all the requirements of subsection 38-45(1) of the GST Act. A GST-free item is GST-free all of the way down the supply chain and not only when supplied to a person with an illness or disability.

The entity supplies vertical lifts that comply with AS 1735.15 to persons with disabilities.

Item 88 in the table in Schedule 3 to the GST Act (Item 88) which lists 'manual, electric, ceiling track or pool hoist specifically designed for people with disabilities', is broad enough to cover slow speed vertical lifts specifically designed for people with limited mobility is considered to cover slow speed vertical lifts specifically designed for people with limited mobility.

The ordinary meaning of 'hoist' as defined in The Macquarie Dictionary (November 2024) www.macquariedictionary.com.au accessed 13 November 2024 is:

1. to raise or lift, especially by some mechanical appliance: to hoist sail.

6. a lift for heavy goods; goods lift.

7. the act of hoisting; a lift.

While devices that are normally covered by Item 88 would be those devices that are used to lift an individual and transfer them, for example, from a bed to a wheelchair or from a wheelchair into a pool, it is considered that the ordinary meaning of 'hoist' is capable of covering lifts.

Item 88 restricts the device to those which are specifically designed for people with disabilities.

Supply of the lifts

To be covered by Item 88 and also to satisfy the second requirement in subsection 38-45(1) of the GST Act, the lifts that that the entity supplies must be specifically designed for people with disabilities.

Lifts complying with AS 1735.15 are low rise passenger lifts that are intended primarily to provide vertical access for persons with limited mobility. This evidences that the lifts are specifically designed for people with disabilities. They are not merely general purpose passenger lifts with additional facilities for people with disabilities such as lower buttons which are accessible by people in wheelchairs.

As such, lifts that satisfy AS 1735.15 are covered by Item 88. This means that the first and second requirements in subsection 38-45(1) of the GST Act are satisfied.

The third requirement in subsection 38-45(1) of the GST Act is that the thing supplied is not widely used by people without an illness or disability. Lifts that comply with AS 1735.15 are lifts for use primarily by people with limited mobility. The lifts are promoted as a means for them to continue living in their own homes without the need to relocate to a single dwelling house. As such, this requirement is also satisfied.

As all the requirements of subsection 38-45(1) of the GST Act are satisfied, you are making a GST-free supply when you supply lifts that comply with AS 1735.15.

Installation of the lifts

The GST Act does not provide for the supply of labour including installation of a GST-free medical aid or appliance. For example, labour for the installation of a GST-free medical aid or appliance that is not provided by the supplier of the medical aid or appliance, or that is provided by the same supplier but in a later transaction that is distinct and separate to the supply of the medical aid or appliance, does not form part of the GST-free supply of that medical aid or appliance and is not GST-free under subsection 38-45(1) of the GST Act.

However, where the medical aid or appliance is supplied together with a labour component as part of one single transaction, the GST treatment of that transaction will depend on how the supply is characterised. Generally speaking, a supply of a medical aid or appliance together with a labour component may be characterised in one of three ways:

1. The main supply is the GST-free medical aid or appliance and the labour is integral, ancillary or incidental to that main supply - in this case, there is a single GST-free supply of a medical aid or appliance (which includes the labour)

2. The main supply is the labour (as is usually the case for repair work) and the GST-free medical aid or appliance (or most commonly, its GST-free spare part) is integral, ancillary or incidental to that main supply - in this case, there is a single taxable supply of labour and the GST-free aid or appliance, or spare part also becomes taxable, or

3. There are separately identifiable supplies of GST-free medical aids or appliances and labour, neither of which is integral, ancillary or incidental to the other - in this case, the supply is partly taxable and partly GST-free and must be apportioned on a reasonable basis.

Some indicators that something may be integral, ancillary or incidental to another thing are:

•                it represents a marginal proportion of the total value of the package compared to the dominant part,

•                it is necessary or contributes to the supply as a whole but cannot be identified as the dominant part of the supply,

•                it contributes to the proper performance of the contract to supply the dominant part, and

•                a supplier would reasonably conclude that it does not constitute for customers an aim in itself, but is a means of better enjoying the dominant thing supplied.

Therefore, a part of a supply will be integral, ancillary or incidental to another part of the supply where it is insignificant in value or function, or merely complements the dominant part of the supply.

GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts (GSTR 2001/8) provides further guidance at paragraphs 17and 55:

Composite supply

17. In this Ruling, the term 'composite supply' is used to describe a supply that contains a dominant part and includes something that is integral, ancillary or incidental to that part You treat a composite supply as a supply of a single thing. Paragraphs 55 to 63 explain what are integral, ancillary or incidental parts.[...]

[...]

Integral, ancillary or incidental parts

55. Some supplies include parts that do not need to be separately recognised for GST purposes. We refer to these parts of a supply as being integral, ancillary or incidental. In a composite supply, the dominant part of the supply has subordinate parts that complement the dominant part. If such a supply is analysed in a commonsense way, it can be seen that the supply is essentially the provision of one thing. It need not be broken down, unbundled or dissected any further. For this reason, a composite supply may appear, at first, to have more than one part, but is treated as if it is the supply of one thing.

You have provided that the lift is the dominant item in the supply of the lift and is required to be installed which is integral to the supply of the lift.

As such, where the installation of the lifts is integral, ancillary or incidental to the supply of the lifts, the installation will also be GST-free (provided the installation is also supplied by you and not by a separate entity).

Note, labour for the installation of a GST-free medical aid or appliance that is not provided by the same supplier of the GST-free medical aid or appliance, or that is provided by the same supplier but in a later transaction that is distinct and separate to the supply of the GST-free medical aid or appliance, does not form part of the GST-free supply of that medical aid or appliance and is not GST-free under subsection 38-45(1) of the GST Act.