Edited version of private advice

Authorisation Number: 1052365907795

Date of advice: 3 March 2025

Ruling

Subject: GST - Medical Aids and appliances

Question

Will you be entitled to an input tax credit under section 11-20 of the GST Act for a medical aid 1 installed in your private residential home?

Answer

No, you will not be entitled to an input tax credit under section 11-20 of the GST Act for a medical aid 1 installed in your private residential home.

Relevant facts and circumstances

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

You are building a new private residential home.

You intend to install a medical aid 1 in your new private residential home.

The medical aid 1 has some limited mobility features:

•                     Handrail

•                     Minimum Entry Width

•                     Entry pass protection and

•                     Handsfree communication

The medical aid 1 complies with the Australian Standards Code AS 1735 Part 18 (AS 1735.18) Residential Single Dwelling.

The medical aid 1 will be supplied and installed by an entity that is registered for GST.

You have provided a medical certificate indicating that you have limited mobility.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 11-5

A New Tax System (Goods and Services Tax) Act 1999 Section 11-20

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

Unless otherwise stated, all legislative references are to the GST Act

Section 11-20 entitles you to an input tax credit for any creditable acquisition that you make.

Under section 11-5 you make a creditable acquisition if:

•                     you acquire anything solely or partly for a creditable purpose, and

•                     the supply of the thing to you is a taxable supply, and

•                     you provide, or are liable to provide, consideration for the supply, and

•                     you are registered or required to be registered for GST.

According to the facts, you are registered for GST and are liable to provide consideration for the supply of the medical aid 1. Therefore, to determine if you have made a creditable acquisition, it must be ascertained, if the supply of the thing to you is a taxable supply and if you acquire the medical aid 1 solely or partly for a creditable purpose.

The supply of the thing to you is a taxable supply

Section 9-5 states you make a taxable supply if:

•                     you make a supply for consideration

•                     the supply you make is made in the course or furtherance of an enterprise that you carry on,

•                     the supply is connected with the indirect tax zone, and

•                     you are registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent it is GST-free or input taxed.

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

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

•                     the thing supplied is specifically designed for people with an illness or disability, and

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

Item 88 in the table in Schedule 3 of the GST Act (Item 88) is listed under the "Mobility of people with disabilities - physical transfer aids" category and the medical aids and appliances listed under this item are "manual, electric, ceiling track or pool hoists specifically designed for people with disabilities".

The usual devices that are covered by Item 88 are medical aids and appliances that are used to 'hoist' people with disabilities and transfer them, for example, from a bed to a wheelchair or from a wheelchair into a pool.

The word 'hoist' is not defined in the GST Act and therefore will take on the ordinary meaning. The ordinary meaning of 'hoist' is explained in The Macquarie Dictionary as:

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

         4.noun - an apparatus for hoisting, as a lift.

         7.the act of hoisting; a lift.

We consider that the ordinary meaning of 'hoist' also covers lifts such as limited mobility lifts for people with an illness or disability. These lifts are used to 'hoist' people with disabilities and transfer them between floors.

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

The Australian Standards in relation to lifts, escalators and moving walks (AS 1735) have parts which relate to people with limited mobility, for example, AS 1735.16 applies to 'passenger lifts that are intended primarily to provide vertical access for persons with limited mobility'. This evidences that some lifts are specifically designed for people with disabilities and are not merely general purpose passenger lifts with additional facilities for people with disabilities.

The medical aid 1 that you are installing complies with AS1735.18 which covers medical aid 1 for use in private residences. The scope of AS 1735.18 is not limited to medical aid 1 primarily for use by people with a disability. Therefore, this medical aid 1 is not specifically designed for persons with a disability.

To meet all of the requirements under subsection 38-45(1) of the GST Act the medical aid 1 will:

•                     need to be specifically designed for people with an illness or disability; and

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

Specifically designed for people with an illness or disability

As the requirements of Item 88 are that the aid or appliance must be specifically designed for people with a disability, and Item 88 has not been satisfied, this requirement is also not satisfied.

Not widely used by people without an illness or disability

The phrase 'not widely used' is not defined in the GST Act. It therefore takes its ordinary meaning, having regard to the context in which it appears. In the context of paragraph 38-45(1)(b), the Commissioner considers 'not widely used' to mean not used by many people who do not have an illness or disability.

In determining whether a medical aid and appliance is used by people without an illness or disability reference should be made to how the wider community uses these goods. That is, the common purpose for which the goods are purchased.

Although medical aid 1 that meet AS 1735.18 may have some features for people with disabilities, they are general purpose medical aid 1 which would be widely used by people without illnesses or disabilities.

As all the requirements in subsection 38-45(1) have not been satisfied, the supply of the medical aid 1 is not GST-free.

Therefore, the supply of the medical aid 1 is a taxable supply to you because you provide consideration for the supply, the supply is made within Australia, the supplier is in the business of supplying medical aid 1's and is registered for GST, and the supply is not GST-free or input taxed.

Acquired anything solely or partly for a creditable purpose

Subsection 11-15 provides that you acquire a thing for a creditable purpose to the extent that you acquire the thing in carrying on your enterprise. However, you do not acquire the thing for a creditable purpose to the extent that the acquisition relates to making supplies that would be input taxed or the acquisition is of a private or domestic nature. Since the acquisition of the medical aid 1 is for the purpose of assisting you to safely access different xxxx of your private home, the medical aid 1 is of a private nature. Therefore, you have not acquired the medical aid 1 for a creditable purpose.

As you have not satisfied all the requirements of section 11-5, you have not made a creditable acquisition and therefore are not entitled to an input tax credit under section 11-20 for the acquisition of the medical aid 1.