Private ruling: GST and medical aid and appliances
Date of advice: 23 January 2017
Published: March 2017

Ruling: Q1: Is GST payable on the importation of the scanning device? | A1: Yes.

Relevant facts and circumstances: You are a company registered for GST. You are importing a medical scanning device (device) into Australia for sale which scans for specific medical reasons. The device can be used in situations such as hospitals, military, mass-casualty events, remote areas, sports medicine, paediatrics, ambulance services etc.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 sections 9-5, 13-5, 13-10, 38-45 and 42-5. | A New Tax System (Goods and Services Tax) Act 1999 Schedule 3 GST Regulations Regulation 38–45.01

Reasons for decision: Summary: Subsection 13-5(1) of the GST Act 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. Section 13-10 of the GST Act states: An importation is a non-taxable importation if: (a) it is a non-taxable importation under Part 3-2 of the GST Act, or (b) it would have been a supply that was *GST-free or *input taxed if it had been a supply. | Detailed Reasoning - Non-taxable importation under Part 3-2 of the GST Act: Part 3-2 relates to section 42-5 of the GST Act which in turn relates to Schedule 4 to the Customs Tariff Act 1995 . Goods that qualify for certain customs duty concessions are also non-taxable for GST however, none of section 42-5 or items in Schedule 4 apply to the importation of the medical device. Therefore, the device is not a non-taxable importation under Part 3-2 of the GST Act. | Detailed Reasoning - It would have been a supply that was GST-free or input taxed if it had been a supply: Furthermore, there are no provisions in the GST Act where the supply of the device is input taxed however, we have to determine if it is GST-free as a medical aid or appliance. GST-free supplies of medical aids and appliances: Subdivision 38 of the GST Act provides that supplies of certain goods and services relating to health are GST-free. Subsection 38-45(1) states: (1) 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. Both requirements in subsection 38-45(1) of the GST Act have to be satisfied. The first requirement in subsection 38-45(1) is that the product is covered by Schedule 3 to the GST Act or specified in the Regulations. Schedule 3 The device is not listed in the GST-free medical aids and appliances contained in Schedule 3 to the GST Act. GST Regulations Regulation 38-45.01 contains various medical aids and appliances, none of which has a product the same as the device. Therefore, it is unnecessary to consider the second requirement in subsection 38-45(1) of the GST Act of whether the product is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. The importation of the device is not a non-taxable importation under section 13-10 of the GST Act. Its importation will be taxable under subsection 13-5(1) of the GST Act. | Detailed Reasoning - Taxable supply: The device will be taxable when sold in Australia where section 9-5 of the GST Act is satisfied, that is: ● the supply is made for consideration; ● the supply is made in the course or furtherance of an enterprise the supplier carries on; ● the supply is connected with the indirect tax zone (Australia); and ● the supplier is registered or required to be registered for GST.