ATO ID 2002/169: GST and rubber tips for walking sticks and crutches
Date of decision: 18 December 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier of walking aids, making a GST-free supply under subsection 38-45(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies rubber tips for walking sticks and crutches?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(2) of the GST Act when it supplies rubber tips for walking sticks and crutches.

Facts
The entity is a supplier of walking aids. The entity supplies rubber tips to replace faulty, worn or broken tips of walking sticks and crutches. The rubber tips are specifically designed as spare parts for walking sticks and crutches. The rubber tips are not designed as multiple purpose rubber end stoppers that are also used for different types of goods, such as chairs. The supply of the walking sticks and crutches is GST-free under subsection 38-45(1) of the GST Act. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: Subsection 38-45(2) of the GST Act provides that a supply of a spare part is GST-free if: Spare part is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that term. The Macquarie Dictionary (1997) defines spare part to mean 'a part which replaces a faulty, worn, or broken part of a machine'. Therefore, it is considered that a spare part for a medical aid or appliance is a part that is used to replace a faulty, worn or broken part of a medical aid or appliance. The rubber tips have been designed to replace a faulty, worn or broken part of the walking sticks and crutches. Further, the supply of the walking sticks and crutches is GST-free under subsection 38-45(1) of the GST Act. Therefore, the rubber tips are spare parts for a GST-free medical aid or appliance. The second requirement is that the spare part is specifically designed as a spare part for a GST-free medical aid or appliance. Rubber tips are considered to be specifically designed as a spare part for a walking stick or crutch where they exhibit special characteristics that make them suitable for that purpose and where they are not designed as multiple purpose rubber end stoppers that are also used for different types of goods, such as chairs. It is accepted that a rubber tip will be a specifically designed spare part for a walking stick or crutch where it is not a multiple purpose rubber end stopper and it has characteristics such as: The rubber tips are specifically designed as a spare part for the walking sticks and crutches. Therefore, the supply satisfies the requirements in subsection 38-45(2) of the GST Act. As such, the entity is making a GST-free supply under subsection 38-45(2) of the GST Act when it supplies rubber tips for walking sticks and crutches.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) subsection 38-45(2)
Other references: The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales.
Subject references: Goods and Services Tax GST-free GST health Medical aids & appliances