ATO ID 2001/476: GST and the supply of an alternative mouse device
Date of decision: 25 September 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier of computer equipment, 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 sells the alternative mouse device?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it sells the alternative mouse device.

Facts
The entity is a supplier of computer equipment. The entity sells an alternative mouse device. Unlike a standard mouse that is controlled by hand, the alternative mouse device is controlled by head movement and uses a direct focused beam of light to operate the computer. It is designed for people who are unable to use a standard computer mouse due to upper limb impairment, such as a person who is quadriplegic or a person with cerebral palsy. The entity is registered for goods and services tax (GST). There is no agreement between the entity and the recipient to treat the supply as not a GST-free supply.

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 11 in the table in Schedule 3 (Item 11) lists 'mouth/head sticks/pointers'. Head pointers are not defined in the GST Act. Generally, where a word or phrase is not defined, it is usually interpreted in accordance with its ordinary meaning unless it has a special or technical meaning. Where a word or phrase has a special or technical meaning, it is necessary to determine the meaning by reference to the industry to which that word or phrase relates ( Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222). It is considered that the term 'head pointers' has a special or technical meaning. A head pointer is a device which is placed on the head and is used to point to objects or to press switches or keys on a keyboard. It may operate using a pointer or a focused beam of light. In this case, the alternative mouse device is controlled by head movements and uses a direct focused beam of light to operate the computer. Therefore, it is considered that the mouse device is covered by Item 11. The alternative mouse device is designed for people who have an upper limb impairment such as a quadriplegic or a person with cerebral palsy. Therefore, it is considered the alternative mouse device is specifically designed for people with an illness or disability and not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45c(1) of the GST Act when it sells the alternative mouse device.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) Schedule 3 Schedule 3 table item 11
Case references: Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222
Subject references: Goods & services tax GST free GST health Section 38-45 - medical aids & appliances