ATO ID 2001/509: GST and the installation of medical alert device components
Date of decision: 22 August 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier and installer of medical alert device components, 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 components, labour and materials used to build up an emergency nurse call system (call system) in situ (on site)?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies components, labour and materials used to build up an emergency nurse call system in situ (on site).

Facts
The entity is a supplier and installer of medical alert device components, and sells a call system to a nursing home. The call system is built up in situ from various components and forms part of the structure of the building. The supply by the entity of the call system includes all installation costs such as labour used in hardwiring through walls and ceilings, and the use of materials such as cable for wiring, connectors and plugs, etc. The supply of the call system is only complete and identifiable as such, when it has been fully installed. There is only one charge for the supply, that being the supply of the installed call system. The emergency call system 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 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 and appliance is GST-free where the medical aid or appliance: Item 33 in the table in Schedule 3 (Item 33) specifies 'medical alert' devices. It is considered that a medical alert device is a device that is designed for the purpose of alerting medical/caring personnel or an ambulance service that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment. An emergency call system falls within the meaning of Item 33. The issue here is whether the supply of components, labour and materials used to build up a call system in situ is a medical alert device within the meaning of Item 33. Generally, the supply of a medical aid or appliance built up in situ from various components that do not become identifiable as a medical aid or appliance until installation is completed, includes installation charges as part of the GST-free supply. In this case, the call system is built up in situ and is not complete until it is installed. After the installation of the call system, the installed components are identifiable as a 'medical alert' device within the meaning of Item 33. In addition, there is only one charge for the supply. The charge is for the supply of medical alert device components which make up the call system, labour and materials used to build the call system in situ. The call system 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 components, labour and materials used to build an emergency nurse call system in situ.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) Schedule 3 Schedule 3 table item 33
Subject references: Goods & services tax GST- free GST health Section 38-45 - medical aids & appliances