ATO ID 2001/346: GST and implantable joint prostheses
Date of decision: 6 August 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier of implantable prostheses, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies implantable joint prostheses to a medical practitioner for use in a surgical procedure?

Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies implantable joint prostheses to a medical practitioner for use in a surgical procedure. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts
The entity is a supplier of implantable prostheses. In this case, the entity is supplying implantable joint prostheses to a medical practitioner for use in a medical procedure. The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.

Reasons for decision
Summary: Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances is GST-free where the medical aid or appliance: Implantable joint prostheses are not covered in Schedule 3 and neither are they specified in the GST Regulations. As such, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act. The entity is registered for GST and the supply meets the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 section 13-5 Division 38 subsection 38-45(1) Division 40 Schedule 3
Subject references: Goods and services tax GST free GST health Medical aids & appliances Taxable supply