ATO ID 2005/80: GST and supply of Braille overlay for existing sign
Date of decision: 8 April 2004
Business line: Indirect Tax

Issue
Is the entity, a sign manufacturer and supplier, 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 and installs a Braille overlay for a sign?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies and installs a Braille overlay for a sign.

Facts
The entity is a sign manufacturer and supplier. The entity manufactures and supplies a Braille overlay for an existing sign that is located in a public building. The entity did not supply the existing sign. The existing sign contains information in the form of words and diagrams. The Braille overlay is a Braille translation of that existing information which is recorded on a 'Braille skin' that is then laid over the existing sign. The existing sign is located in a public building and provides information as to the location of various areas and amenities inside and outside of the building, including: toilets, parents' rooms, lifts, stairs, and access ramps. The existing sign is designed as a directional aid for the general public, whether sighted or visually impaired. There is no agreement between the entity and the recipient of the supply that the supply will be treated as taxable. 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 151 in the table in Schedule 3 (Item 151) lists 'auditory/tactile alerting devices'. The phrase 'auditory/tactile alerting devices' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that phrase. The Macquarie Dictionary (1997), 3rd edition, The Macquarie Library Pty Ltd, New South Wales defines 'auditory' to mean 'relating to hearing, or the sense of hearing ...', 'tactile' to mean '1. of or relating to the organs of sense or touch. 2. perceptible to the touch ...' and 'alert' to mean '... 4. an alarm or warning...' Accordingly, an auditory/tactile alerting device is a device which is designed to alert a visually impaired person to a presence, occurrence or danger through the person's sense of touch or hearing. The Braille overlay constructed, supplied and installed by the entity uses Braille to relay information to the visually impaired through their sense of touch. The overlay is installed on signs located in public buildings and provides a Braille translation of the information contained on that sign. Its purpose is to alert the visually impaired as to the location of various areas and amenities inside and outside of the building, including: toilets, parents' rooms, lifts, stairs and access ramps. Therefore, the Braille overlay is an auditory/tactile alerting device and is covered by Item 151. The Braille overlay is designed specifically for the purpose of translating and communicating information to the visually impaired and is only used by people able to read Braille. The overlay itself does not comprise any non-Braille component for use by the sighted, such as words or diagrams, and therefore, is not widely used by people who are not visually impaired. As such, the supply of the Braille overlay meets the requirements of subsection 38-45(1) of the GST Act and is GST-free. The GST Act does not provide for the supply of labour services relating to medical aids and appliances to be GST-free. For example, labour for the installation of a GST-free medical aid/appliance that is not provided by the supplier of the medical aid/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/appliance, does not form part of the GST-free supply of the medical aid/appliance and is not GST-free under subsection 38-45(1) of the GST Act. However, where the supply of GST-free medical aids/appliances is supplied in one transaction which also includes labour components (such as for the installation of the medical aid/appliance), the GST treatment of the transaction will depend on how the supply is characterised. It will either be: In this instance, the substance of the entity's supply was the Braille overlay itself. The labour involved in attaching the Braille overlay to the existing sign is incidental to the supply of the overlay and forms no significant component of the entity's overall supply. Therefore, the supply of the labour component, being integral, ancillary or incidental to the supply of the Braille overlay itself, forms part of the GST-free supply of the Braille overlay under subsection 38-45(1) of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1)
Related ATO interpretative decisions: ATO ID 2005/78 | ATO ID 2005/79 | ATO ID 2002/230
Other references: The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales Health Industry Partnership - Issues Register: Issue 4.a.13
Subject references: Goods and services tax GST free GST health Section 38-45 - medical aids & appliances