ATO ID 2001/280: GST and Doorbell Alert System
Date of decision: 5 July 2001
Business line: Indirect Tax

Issue
Is the 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 doorbell alert system?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a doorbell alert system.

Facts
The entity is a supplier of medical aids and appliances. In this case, the entity is supplying a specifically designed doorbell alert system. The doorbell alert system is made up of two components; a doorbell component and a remote component. The two components cannot work independently. The remote portion has a combined sound and flashing strobe alert and is completely portable. The doorbell alert system is specifically designed for people whose disabilities range from minor hearing problems to profound hearing loss. The doorbell alert system is not widely used by people without an illness or disability. The entity is registered for goods and services tax (GST). There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply.

Reasons for decision
Summary: Under subsection 38-45(1) of the GST Act the supply of a medical aid or appliance is GST-free if: Item 47 in the table in Schedule 3 lists 'visual/tactile alerting devices' (Item 47). This term is not defined in the GST Act and must therefore be given its ordinary meaning. The Macquarie Dictionary (1997) defines 'alert' to mean 'an alarm or warning'. Based on this definition, it is considered that 'visual/tactile alerting devices' are devices that are designed to alert vision and hearing impaired people to a strong occurrence, danger or presence. In this case, the doorbell alert system alerts hearing impaired persons to the fact that someone is present at the door of their residence, via a flashing strobe light. Therefore, it is considered that the doorbell alert system falls within the scope of Item 47. As the doorbell alert system is covered by Schedule 3; is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability; the entity is making a GST-free supply of a medical aid or appliance 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) Schedule 3 Schedule 3 table item 47
Subject references: Goods & services tax GST free GST health Medical aids & appliances