ATO ID 2004/521: GST and stoma cream product
Date of decision: 22 April 2004
Business line: Indirect Tax

Issue
Is an entity, a supplier of medical aids and appliances, 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 a cream that is listed on the Stoma Appliance Schedule?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a cream that is listed on the Stoma Appliance Schedule.

Facts
The entity is a supplier of medical aids and appliances. The entity supplies a cream that is listed on the Stoma Appliance Schedule under the Stoma Appliance Scheme. This scheme is administered by the Commonwealth Department of Health and Ageing. The cream protects the user's skin and the listing on the Stoma Appliance Schedule identifies the cream as a product that assists people who have to wear an ostomy product as a consequence of having a stoma created by surgery. The cream is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. There is no agreement between the entity and the recipient of the supply that the supply will not be treated as a GST-free supply. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: 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: Item 142 in the table in Schedule 3 (Item 142) lists stoma products including all bags and related equipment for patients with colostomies and ileostomies. The Stoma Appliance Schedule under the Stoma Appliance Scheme is administered by the Commonwealth Department of Health and Ageing and any product listed on the Stoma Appliance Schedule is a stoma product covered under Item 142. The entity supplies a cream that is listed on the Stoma Appliance Schedule under the Stoma Appliance Scheme, which is administered by the Department of Health and Ageing. As such, the entity's product satisfies the first requirement under subsection 38-45(1) of the GST Act. In addition, the cream is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a cream that is listed on the Stoma Appliance Schedule.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) Schedule 3 Schedule 3 table item 142
Other references: Stoma Appliance Scheme, Commonwealth Department of Health and Ageing - 'Continence Aids Assistance Scheme', The National Continence Management Strategy.
Subject references: Goods and services tax GST free GST health Section 38-45 - medical aids & appliances