Private ruling: GST and medical aids and appliances
Date of advice: 31 August 2017
Published: December 2017

Ruling: Q1: Is the supply of a specified product (the product) a GST-free supply? | A1: Yes. Under subsection 38-45(1) of the A New Tax System Goods and Services Tax Act 1999 (GST Act), the supply of a medical aid or appliance is GST-free where the medical aid or appliance: ● is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 ● is specifically designed for people with an illness or disability, and ● is not widely used by people without an illness or disability. Item 126 in the table in Schedule 3 (Item 126) lists the medical item. The product is specifically designed as a component for the medical item the supply of which is GST-free under item 125 in Schedule 3 (Item 125). Therefore the product is covered by Item 126. The product is not general purpose product and is not widely used by people without an illness or disability, the supply of which is not GST-free. As all the requirements in subsection 38-45(1) of the GST Act are satisfied, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you supply the product.

Relevant facts and circumstances: Your website provides that you specialise in the design and manufacture of the products. You manufacture the product for the medical item that are sold by your customers. You provided details of the product and your customer arrangements. The product is specifically designed as a component for the medical item the supply of which is GST-free under Item 125. Further, the product is not a general purpose product and is not widely used by people without an illness or disability, the supply of which is not GST-free. There is no agreement between you and your customers that the supply will not be treated as a GST-free supply.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 (GST Act) Subsection 38-45(1). | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) Subsection 38-45(3).