Private ruling: Goods and services tax (GST) and medical aids and appliances
Published: July 2014

Ruling: Q1: Is the importation and sale of your medical alert devises and power adaptors used to charge their batteries GST-free? Decision Yes, the importation and sale of your medical alert devises and power adaptors used to charge their batteries is GST-free.

Relevant facts and circumstances: • You carry on an enterprise. • You import medical alert devices to market in Australia. • These devices are being marketed to aged seniors and carers of those with dementia, MS and autism. • They are supplied with a lanyard as standard equipment and both models are designed to be worn around the neck by an individual during their waking hours. • The apparatus is designed to be monitored remotely by family and friends. • It is also possible to program emergency services contact (000) into these medical alert devices. • The apparatus has GSM and / or GPS readers in the event that the wearer becomes lost or disorientated due to age related issues or psychological dysfunction of the user. • The apparatus can send SOS text messages to emergency contacts. • One model can call pre-programmed telephone numbers, receive telephone calls from anyone, has a SOS button, two way voice communication and a rechargeable battery. • One model has a replaceable battery, external volume control and is waterproof. • The apparatus has been specifically designed for aged seniors and those with dementia, MS and autism because of the devices' GPS and remote monitoring capacities. • This type of apparatus would not be widely used by people without an illness or disability. • You also supply by way of resale another model of medical alert device, which you acquire from an interstate competitor and the supplier supplies this product within Australia on a GST-free basis as a medical alert device. • Another of your competitors also supplies its similar pendant alert devices within Australia on a GST-free basis as a medical alert device. • Your major competitors sell their parallel products on GST-free basis because they are specifically designed for people with an illness or disability. • Your imported apparatus requires a power adaptor to charge their batteries. • Other associated items to be sold with the imported apparatus such as an optional belt, a hard cover case, cord locks and SIM cards will not be sold on a GST-free basis.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-45 | A New Tax System (Goods and Services Tax) Act 1999 section 13-10 paragraph (b) | A New Tax System (Goods and Services Tax) Act 1999 Schedule 3 Reasons for the decision | Subsection 38-45(1) of the GST Act provides that a supply is GST-free if it is a supply of a medical aid or appliance: | (a) covered by an item contained in Schedule 3 of the GST Act 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 33 of Schedule 3 of the GST Act lists 'medical alert' devices as a GST-free medical aid or appliance. | Thus the models you import meet the first requirement of subsection 38-45(1) of the GST Act. | They are designed for people with an illness or disability and will not be widely used by people without an illness or disability. Thus they meet the second requirement of subsection 38-45(1) of the GST Act. Therefore supplies of the two models are GST-free supplies. | Further, subsection 38-45(2) of the GST Act provides that a supply is GST-free if it is specifically designed as a spare part for a medical aid or appliance, the supply of which is GST-free. Thus your supplies of the power adaptors used to charge the batteries of the models are also GST-free as these are specifically designed as a spare part for a medical aid or appliance the supply of which is GST-free. | Paragraph (b) of section 13-10 of the GST Act provides that an importation is a non-taxable importation if it would have been a supply that was GST-free or input taxed in Australia. Therefore, as the supply of the models and their power adaptors are GST-free in Australia, their importation is a non-taxable importation.