Private ruling: Goods and service tax (GST) and test strips
Date of advice: 24 March 2020
Published: May 2020
Ruling period: On and from the date of issue.

Ruling: Q1: Is the supply of UTI strips a GST-free supply of a medical aid and appliance under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the supply of the UTI self-test strips is a GST-free supply under subsection 38-45(1) of the GST Act.

Relevant facts and circumstances: You are registered for goods and services tax (GST). You manufacture and sell the self-test strips which are used to detect infections for general public use. UTI test strips are self-testing strips that can detect if you have a UTI. With these test strips you can test yourself and have results in two minutes. UTI test strips are to be used when symptoms are apparent. Urinalysis UTI test strips detect leucocytes and nitrite in the urine. Strips can be used on anyone, male or female of any age. Test strips are to be used only by those individuals who are presenting with the symptoms. The test strips serve no other purpose for anyone else other than for individuals presenting with the symptoms. The test strips are particularly convenient to provide simple detection in those who cannot communicate symptoms easily i.e. intellectually disabled, people with dementia and children. The products are available to purchase online and as well are distributed to chemists.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-45

Reasons for decision: Summary: A supply of goods is GST-free under subsection 38-45(1) of the GST Act if certain requirements are met. It states: A supply is GST-free if: (a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and; (b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability. Item 36 in the table in Schedule 3 to the GST Act (Item 36) lists 'test strips'. It is considered that the test-strips are covered by Item 36. What needs to be considered is whether the test strip is specifically designed for people with an illness or disability and not widely used by people without an illness or disability. In determining whether a medical aid and appliance is specifically designed for people with an illness or disability reference should be made to the designer's/manufacturer's intention of how the good is to be used and it's features. Indicators of the designer's/manufacturer's intention of how a good is to be used include how the good is marketed and the type of retail outlets at which the goods can be purchased. To determine whether something is widely used by people without an illness or disability we consider the sales/marketing of the product and where it is supplied. The information in your application and website indicates that the test strips are specifically designed to be used for individuals presenting with the symptoms. Further, the strips are also beneficial for people who cannot communicate symptoms easily i.e. intellectually disabled, people with dementia and children. The strips serve no purpose in being used by normal healthy people. They are designed to test people who are at risk or presenting with symptoms. As a result, we consider that the requirements of paragraph 38-45(1)(b) of the GST Act are met. As you meet all of the requirements of subsection 38-45(1) of the GST Act, your supply of the test strips is GST-free.