Private ruling: GST and the supply of a motorised wheelchair
Date of advice: 1 April 2021
Published: June 2021

Ruling: Q1: Is the supply of the Product a GST-free supply under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the supply of the Product is a GST-free supply. | Q2: Is GST payable on the importation of the Product under section 7-1 of the GST Act? | A2: No, GST, is not payable on the importation of the Product. | Q3: Is GST payable under section 7-1 of the GST Act when the Product is supplied to a person without a disability? | A3: No, GST is not payable when the Product is supplied to a person without a disability. | Q4: Is GST payable on the supply of spare parts to the Product? | A4: a. GST is not payable on the supply of spare parts that are specifically designed for the Product. b. GST is payable on the supply of spare parts that are not specifically designed for the Product. Note: Where the Product becomes widely used by people without an illness or disability (rather than by people with an illness or disability) this Ruling will no longer be applicable.

Relevant facts and circumstances: You will be importing the Product and selling it to individuals in Australia. The Product is akin to a motorised wheelchair and is a personal mobility device that has been designed specifically for people with disabilities. The Product has been designed with the intention of increasing mobility of people with disabilities. The Product is not widely used by people without an illness or disability. You will also be supplying spare parts to the Product. Some spare parts are specifically designed for the Product and some are not specifically designed for the Product. Currently you as the supplier and the importer of the Product and the recipient of the Product do not have an agreement which states that the supply of the Product and/or the spare parts to the Product are to be not treated as GST-free supplies.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 and | Section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision: Summary: GST is payable on taxable supplies. A taxable supply is defined in section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) as follows: 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. (terms marked with asterisks (*) are defined in section 195-1 of the GST Act) The relevant provision to consider in this case is section 38-45 of the GST Act which states that the supply of medical aids and appliances is GST-free. In order for something to be GST-free under section 38-45 of the GST Act, that thing must be: • listed in schedule 3 to the GST Act or in schedule 3 to the GST regulations (Schedule 3), • specifically designed for people with an illness or disability, • not widely used by people without an illness or a disability. We are of the view that the supply of the Product satisfies the requirements of section 38-45 of the GST Act for the following reasons: Item 105 to Schedule 3 lists: wheelchairs, motorised wheelchairs, scooters, tricycles, spinal carriages and other goods for the carriage of people with disabilities Given that the Product is akin to a motorised wheelchair, we are of the view that it falls within item 105 of Schedule 3. We have been advised that the Product has been specifically designed for people with an illness or disability and that the Product is not widely used by people without an illness or disability. On this basis the Product is considered as a medical aid that falls within item 38-45 of the GST Act. Accordingly, the supply of the Product is a GST-free supply and as such no GST is payable. | Detailed Reasoning - Importations: GST is payable on taxable importations. Section 13-5 of the GST Act defines a taxable importation as follows: 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 defines a non-taxable importation as follows: An importation is a non-taxable importation if: (a) it is a non-taxable importation 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. Accordingly, given that the supply of the Product is a GST-free supply, the importation of the Product meets paragraph 13-10(b) of the GST Act and as such is a non-taxable importation. However, where the Product becomes widely used by people without an illness or disability (rather than by people with an illness or disability) this Ruling will need to be reviewed. This is because, the third requirement of section 38-45 of the GST Act may no longer be satisfied and therefore the supply of the Product may have different GST consequences. | Detailed Reasoning - Supplying to a person without a disability: Given that a supply of a medical aid and appliance that satisfies the requirements of section 38-45 of the GST Act is GST-free at every point in the supply chain (from manufacturer to consumer), the supply of the Product to a person without a disability or illness will also be GST free. | Detailed Reasoning - Spare parts: 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 would be GST-free under subsection (1). Accordingly, the supply of those spare parts that are specifically designed for the Product is a GST-free supply. The supply of those spare parts that are not specifically designed for the Product is not a GST-free supply. The supply of these spare parts (ie: those that are not specifically designed for the Product) is a taxable supply and as such GST is payable on such supplies.