Private ruling: GST - medical appliances
Date of advice: 2 June 2026
Published: 17 August 2026

Ruling: Q1: Is the supply of the Continuous Positive Airway Pressure (CPAP) machine set in a carry bag GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act? | A1: Yes. | Q2: Is the separate supply of the following CPAP machine components GST-free under section 38-45 of the GST Act? • CPAP masks • Air filter • AC adaptor • Power cable • Heated tubing • Air tube • Water tank | A2: Yes. | Q3: Is the separate supply of a Secure Digital (SD) card GST-free under section 38-45 of the GST Act? | A3: No. | Q4: Is the separate supply of the carry bag for the CPAP machine GST-free under section 38-45 of the GST Act? | A4: Yes. | Q5: Are the importations of the following products non-taxable importations under section 13-10 of the GST Act? • CPAP machine set in carry bag • CPAP machine • circuit board • CPAP mask • air filter • AC adaptor • power cable • heated tubing • air tube • water tank • carry bag for CPAP machine | A5: Yes. | Q6: Are the importations of SD cards non-taxable importations under section 13-10 of the GST Act when they form part of an import consignment with a customs value of $1,000 or less? | A6: Yes. | Q7: Are the importations of SD cards non-taxable importations under section 13-10 of the GST Act when they form part of an import consignment with a customs value of more than $1,000? | A7: No.

Relevant facts and circumstances: You are registered for GST. You carry on a business of selling medical devices. You import and sell a certain brand of CPAP sleep apnoea machine (CPAP machine). The CPAP machines are designed to treat obstructive sleep apnoea in patients weighing more than XX kgs. They are intended for home and hospital/institutional use. The CPAP machines use electric power to generate positive airway pressure, and they deliver air to patients within a therapeutic range. The CPAP machines are restricted to sale to or on order of a physician. These machines are included on the Australian Register of Therapeutic Goods. The Harmonisation System Code is XXXXXXXXX. You import CPAP machine sets in durable carry bags. These sets include the CPAP machine (with inbuilt circuit board) and the following Components • Air filter • AC adaptor • Power cable • Heated tubing • Air tube • Water tank You sell these CPAP machine sets in their carry bags. You also import the following products separately and you sell these products separately to replace faulty, worn or broken units: • CPAP masks • Air filters • AC adaptors • Power cables • Heated tubing • Air tube • Water tank • Carry bags In future, you will separately import SD cards and supply them separately to replace the original SD card. The SD cards are generic SD cards that can be used for many different purposes. You import circuit boards to install into CPAP machines to replace faulty, worn or broken circuit boards as part of a warranty repair. You do not sell circuit boards separately. The following items are only able to be used with the CPAP machine or CPAP machines in general, are designed to support the functionality of the CPAP machine or CPAP machines in general and are not able to be used independently of the CPAP machine or CPAP machines in general and are specifically designed to function together with a CPAP machine as a single respiratory system (CPAP Therapy System) for the treatment of sleep apnoea: • Circuit boards • CPAP masks • Air filters • AC adaptors • Power cables • Heated tubing • Air tube • Water tank You do not undertake any assembly or manufacturing activities in Australia. Further information about the functions of the Components used in connection with a CPAP machine is detailed below: CPAP mask The CPAP mask is fitted to a person's face and is the interface for airflow delivery from the CPAP machine. Air filter The air filter filters incoming air to remove dust and particulate matter, ensuring clear air delivery for user safety and proper device operation. The air filter is specifically designed for the particular CPAP model you import and sell. It is not designed to be used with other models of CPAP machine. AC adaptor The AC adaptor converts household AC power to the DC power required by the CPAP machine, providing a stable power supply for the machine. This activates the CPAP machine. Power cable The power cable converts the AC adaptor to the power outlet to transmit electrical energy, serving as the essential link for powering the CPAP machine. The power cable/power supply is specifically designed to connect to the CPAP machine you import and sell. It has a special type of connector which is specifically designed to be inserted into a slot in the CPAP machine. Heated tubing The heated tubing features heating capabilities to regulate air temperature within the tube, preventing condensation and enhancing comfort, especially in cold environments. Condensation could potentially lead to health hazards, such as mould. A purchaser may choose to exchange the heated tubing with the non-heated tubing when purchasing the CPAP machine. Air tube The air tube connects the CPAP machine to the mask and delivers treated air, serving as the primary channel for transporting therapy gas to the user. The air tube is specifically designed for the particular CPAP model you import and sell. It is not designed to be used with other models of CPAP machine. Water tank The water tank holds distilled water to humidify the airflow, preventing respiratory dryness and improving comfort during long-term use. The water tank is specifically designed for the particular CPAP model you import and sell. It is not designed to be used with other models of CPAP machine. SD card The SD card is inserted into a CPAP machine. The SD card stores CPAP machine usage data - such as usage hours and breathing parameters, for later analysis by clinicians or users to evaluate therapy effectiveness. The SD card is a generic storage device that can be used in many different types of electronic devices The SD card is only needed if the purchaser purchases the CPAP machine with SD card functionality. Circuit board The circuit board is an internal electronic component of the CPAP machine. Further information about the carry bag: The carry bag is specifically designed and manufactured exclusively for the CPAP therapy system. The carry bag is purpose-built to fit and store the CPAP machine and its related therapy components, including the tubing, mask, cables etc. It is designed to take into account the specific specifications of the size of the CPAP machine and the cords and other attachments for it. It is not generic packaging or a standard consumer travel bag. The carry bag is used for transportation, storage and protection of the CPAP therapy system during patient use and travel. Marketing and customer base You market the products in question as medical devices for the treatment of sleep apnoea and components of a CPAP therapy system. You do not market them as general consumer electronics or lifestyle products. The products in question are supplied primarily to individual patients, medical clinics and healthcare providers. You sell the products to distributors, such as sleep clinics, online medical stores and pharmacies. Importation of goods You enter the CPAP machines and Components for home consumption. GST has not been imposed by Australian Border Force on your importation of any of the CPAP machine related products and you have not charged your customers GST or passed on GST in respect of your sales of these products.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 13-5 | A New Tax System (Goods and Services Tax) Act 1999 section 13-10 | A New Tax System (Goods and Services Tax) Act 1999 section 38-45 | Customs Tarriff Act 1995 , Schedule 4

Reasons for decision: Summary: The supply of a CPAP machine set in a carry bag is GST-free under subsection 38-45(1) of the GST Act because: • CPAP machines are listed in Schedule 3 to the GST Act; and • the CPAP machine is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability. | Detailed Reasoning - Detailed reasoning: GST is payable on taxable supplies. You make a taxable supply if you meet the requirements of section 9-5 of the GST Act, which states: You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with the indirect tax zone; and (d) you are *registered or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or input taxed. Subsection 38-45(1) of the GST Act provides that the sale of certain types of medical aids and appliances is GST-free. 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. The CPAP machine Item 124 in the table in Schedule 3 to the GST Act (item 124) lists CPAP machines. CPAP machines treat obstructive sleep apnoea. The machines generate continuous positive airway pressure, and they deliver air to patients. The CPAP machine you sell is designed to treat obstructive sleep apnoea in patients weighing more than 30 kgs. The machine is intended for home and hospital/institutional use. The machines use electric power to generate continuous positive airway pressure, and they deliver air to patients within therapeutic range. Therefore, the CPAP machine you sell is covered by item 124. Goods and Services Tax Industry Issues Pharmaceutical Forum (IIPF) provides the following guidance on determining whether the 'specifically designed' requirement is met: 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. The IIPFstates the following in relation to the 'not widely used' requirement: 1. In determining whether a medical aid and appliance is used by people without an illness or disability reference should be made to how the wider community uses these goods. That is, the common purpose for which the goods are purchased. 2. Subsection 38-45(1) does not require the GST treatment of a medical aid and appliance to be determined by reference to the actual use for which an item is being purchased but rather focuses on the purpose for which the wider community purchases these products. 3. Accordingly, it is considered that irregular and uncommon use of a medical aid and appliance in a way contrary to it's manufactured purpose will not prevent the good from being GST-free. After considering the factors in the IIPF, we conclude that the CPAP machine in question is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability as: • the CPAP machine is solely designed to treat sleep apnoea; • sleep apnoea is an illness or disability; • the CPAP machine is marketed as a medical device for the treatment of sleep apnoea; • the CPAP machine is not marketed as general consumer electronics or a lifestyle product; • the CPAP machine is supplied primarily to individual patients, medical clinics and healthcare providers; you sell it to distributors such as sleep clinics, online medical stores and pharmacies. • the CPAP machine is restricted to sale by or on order of a physician. Therefore, the supplies of the CPAP machine are GST-free as the requirements of paragraphs 38-45(1)(a) and 38-45(1)(b) of the GST Act are met. The circuit boards are not sold separately. They are a component of a CPAP machine that you sell. Therefore, as the sale of the CPAP machine is GST-free, the circuit board forms part of the GST-free sale of a CPAP machine. If you supply the other CPAP related items with the CPAP machine, the entire sale will be a GST-free composite supply of a CPAP machine, including the SD card (if any) and the carry bag, in accordance with Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax Apportioning the consideration for a supply that includes taxable and non-taxable parts (GSTR 2001/8) as the dominant part of the supply would be a CPAP machine, the supply of which is GST-free and the other items sold with the CPAP machine would be integral, ancillary or incidental to that dominant part of the supply. | Detailed Reasoning - Question 2: Are the separate supplies of components of the CPAP machine other than the SD card GST-free under section 38-45 of the GST Act? | Summary: The separate supply of these components is GST-free under subsection 38-45(2) of the GST Act as they are specially designed to replace faulty, worn or broken parts of a medical appliance listed in Schedule 3 to the GST Act (a CPAP machine) and the supply of the CPAP machine is GST-free under subsection 38-45(1) of the GST Act. | Detailed Reasoning - Detailed Reasoning: You sell the following components of a CPAP machine separately (in addition to alternatively selling most of these items with a CPAP machine in a carry bag): • CPAP mask • air filter • AC adaptor • power cable • heated tubing • air tube • water tank. Where you supply any of these components to a customer together with a CPAP machine in a single transaction, you will make a GST-free composite supply of a CPAP machine, in accordance with GSTR 2001/8. We shall now determine whether your sale of any of these items is GST-free as a spare part when you supply it on its own. Subsection 38-45(2) of the GST Act states: A supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing, the supply of which is GST-free under subsection (1). Goods and Services Tax Industry Issues Pharmaceutical Health Forum states under the heading 'Spare parts for medical aids and appliances': What is a spare part for the purposes of subsection 38-45(2)? Are supplies of spare parts for GST-free medical aids and appliances only GST-free when supplied to the person with an illness or disability? 1. A spare part is a part which has been specifically designed to replace a faulty, worn, or broken part of a medical aid or appliance. 2. Spare parts which are specifically designed as spare parts for a GST-free medical aid or appliance, are GST-free at all points in the supply chain. That is, it is not necessary to determine to whom or for what the part is being supplied. Provided the part has been specifically designed to replace a faulty, worn, or broken part of a GST-free medical aid or appliance, the supply of that part will be GST-free under subsection 38-45(2) at all stages of the supply chain. 3. For example, rubber stoppers are generic devices designed for various uses, such as stoppers for the bottom of a steel chair. Therefore as rubber stoppers are not specifically designed for use as a spare part for walking sticks, they are not GST-free as a spare part for a medical aid or appliance. The components of the CPA machine (other than the SD card) are specifically designed to replace faulty, worn or broken parts of a CPAP machine, the supply of which is GST-free under subsection 38-45(1) of the GST Act. Therefore, the supplies of these components (other than the SD card) are GST-free under subsection 38-45(2) of the GST Act. Furthermore, the sale of the masks is also GST-free under subsection 38-45(1) of the GST Act as: • item 125 in the table in Schedule 3 to the GST Act lists respiratory appliance mask assemblies - complete, which covers the masks in your case; and • your masks are specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability given that the masks are specifically designed for CPAP machines, which are specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability. | Detailed Reasoning - Question 3: Is the separate sale of a Secure Digital (SD) card GST-free under section 38-45 of the GST Act? | Detailed Reasoning - Detailed Reasoning: The SD card is generic and has a range of applications. It is not specifically designed as a part for a CPAP machine. Therefore, the sale of an SD card is not GST-free as subsection 38-45(2) of the GST Act has not been met. | Detailed Reasoning - Question 4: Is the supply of the carry bag for the CPAP machine GST-free under section 38-45 of the GST Act? | Detailed Reasoning - Detailed Reasoning: Item 127 in the table in Schedule 3 to the GST Act lists accessories for respiratory appliances. A CPAP machine is a respiratory appliance. ATO Interpretative Decision ATO ID 2004/218 Goods and Services Tax: GST and supply of an airway suction device (ATO ID 2004/218) provides guidance on the meaning of accessory: In accordance with ATO ID 2004/218, there are multiple definitions the ATO uses in determining whether a product is an accessory. ATO ID 2004/218 states: The word 'accessories' is not defined in the GST Act. Accordingly, it is necessary to consider the ordinary meaning of that word. The Australian Concise Oxford Dictionary (1997) defines the word 'accessory' to include 'an additional or extra thing' or 'a small attachment or fitting'. The Macquarie Dictionary (1997) defines 'accessory' as 'a subordinate part or object; something added or attached for convenience, attractiveness, etc., such as a spotlight, heater, driving mirror, etc., for a vehicle.' Furthermore, in Zendel Australia Ltd & Others v. FC of T 92 ATC 4515; (1992) 24 ATR 101 ( Zendel's Case ), Hill J. held that an accessory must contribute to the working of some principal item or its general effect and also an accessory must be an adjunct to an item rather than an adjunct to a process . The carry bag is added to the CPAP machine set for convenience of storage and transport of that principal item. Furthermore, the carry bag contributes to the working of a principal item, being the CPAP machine, as the bag helps to keeps the CPAP machine free of dust, and dust may impact on the performance of the CPAP machine. Additionally, the carry bag is not just packaging for the CPAP machine at the time of sale to be disposed of after the CPAP machine is first taken out of the bag. Instead, the carry bag is meant for permanent storage of the CPAP machine and the bag is specifically designed for storing and transporting the CPAP machine. Therefore, the carry bag is an accessory for the CPAP machine, which is a respiratory appliance. Hence, the carry bag is covered by item 127 and the requirement of paragraph 38-45(1)(a) of the GST Act is met. The carry bag is specifically designed for the CPAP machine, which is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability. Therefore, the carry bag is specifically designed for people with an illness or disability and would not be widely used by people without an illness or disability and the requirements of paragraph 38-45(1)(b) of the GST Act are met. Thus, the sale of a carry bag on its own is GST-free under subsection 38-45(1) of the GST Act. | Detailed Reasoning - Question 5: Are your importations of the following products non-taxable importations under section 13-10 of the GST Act? • CPAP machine set in carry bag • CPAP machine • circuit board • CPAP mask • air filter • AC adaptor • power cable • heated tubing • air tube • water tank • carry bag for CPAP machine | Detailed Reasoning - Detailed Reasoning: You make a taxable importation if you meet the requirements of section 13-5 of the GST Act, which states: You make a taxable importation if: (a) goods are imported; and (b) you enter the goods for home consumption (within the meaning of the Customs Act 1901 ) However, the importation is not a taxable importation to the extent that it is a non-taxable importation. In your case, goods are imported and you enter the goods for home consumption. Therefore, you meet the criteria at paragraphs 13-5(a) and 13-5(b) of the GST Act. Section 13-10 of the GST Act sets out when an importation is a non-taxable importation. It states: An importation is a non-taxable importation if: (a) it is non-taxable under Part 3-2; or (b) it would have been a supply that was GST-free or input taxed if it had been a supply. As determined above the sale of the CPAP machine and the Components other than the SD cards is GST-free. The sale of the carry bag is also GST-free. Therefore, the importations of the CPAP machine and the components (other than the SD card) are non-taxable importations. Additionally, the importation of carry bags is also a non-taxable importation. | Detailed Reasoning - Question 6: Are the importations of SD cards non-taxable importations under section 13-10 of the GST Act when they form part of an import consignment with a customs value of $1,000 or less? | Detailed Reasoning - Detailed Reasoning: Part 3-2 of the GST Act includes subsection 42-5(1), which provides that importations that are subject to certain customs duty exemptions (specified in subsection 42-5(1) of the GST Act) are non-taxable for GST purposes. Where an importation of goods (most types of goods) has a customs value of $1,000 or less, the importation is a non-taxable importation under subsection 42-5(1) of the GST Act, as such low value importations are non-taxable for customs duty purposes due to a concession in Schedule 4 to the Customs Tariff Act 1995 (item 26) and subsection 42-5(1) of the GST Act provides that importations that are covered by item 26 are non-taxable importations for GST purposes. Such importations are importations of a type covered by paragraph 13-10(a) of the GST Act. Therefore, they are not taxable importations. | Detailed Reasoning - Question 7: Are the importations of SD cards non-taxable importations under section 13-10 of the GST Act when they form part of an import consignment with a customs value of more than $1,000? | Detailed Reasoning - Detailed Reasoning: As detailed previously, the supply of SD cards is not a GST-free supply. Additionally, such supplies are not input taxed. Therefore, importations of the SD cards are not non-taxable under paragraph 13-10(b) of the GST Act. Importations of SD cards which form part of an import consignment with a customs value of more than $1,000 are not non-taxable under Part 3-2 of the GST Act either. Therefore, importations of the SD cards under these circumstances are taxable importations under section 13-5 of the GST Act as all of the requirements of that provision are met.

Question 1: Is the supply of CPAP machine set in a carry bag GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?