Private ruling: GST and supply of ECG as GST-free supply
Date of advice: 21 January 2016
Published: May 2016
Ruling period: Not applicable
Date scheme commenced: Not applicable

Ruling: Q1: Is the supply of Electrocardiogram (ECG) devices used in medical centres for heart monitoring, GST-free? | A1: Yes, the supply of ECG devices used in medical centres for heart monitoring is GST-free.

Relevant facts and circumstances: ● You are an Information Technology Company providing QRS Diagnostic equipment and support services mainly for the medical industry. ● You also purchase ECG devices, program them and on sell them to medical centres. ● You purchase ECG devices from suppliers as GST-free. ● You are registered for goods and services tax (GST).

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-45

Reasons for decision: Summary: Division 38 of the A New Tax System (Goods and Services Tax) Act 1999 (GST ACT) sets out the supplies that are GST-free. Subsection 38-45(1) of the GST Act provides that a supply is GST-free if: (a) it 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 (GST Regulations), and (b) the thing supplied is specifically designed for people with an illness or disability, and not widely used by people without an illness or disability. Paragraph 38-45(1)(a) is satisfied where the item is covered under Schedule 3. The relevant item number in relation to the ECG machines is item 1 in the table in Schedule 3 to the GST Act (item 1), which list ‘heart monitors’. The term ‘heart monitors’ is not defined in the GST Act. The Stedman’s Medical Dictionary (2000), 27 th edition, Lippincott Williams & Williams, Baltimore, defines a cardiac (heart) monitor as ‘an electronic monitor which, when connected to the patient, signals each heart beat with a flashing light, an electrocardiograph curve, an audible signal, or all three’. Accordingly, a device with a primary function of monitoring a patient’s heartbeat, is a heart monitor and is covered by Item 1. You advised that you acquire ECG machines from your supplier as GST-free and program them and on sell them to medical centres. Medical aids and appliances which satisfy all of the elements of section 38-45 of the GST Act are GST-free at all stages of the supply chain. (Refer to ATO, Health Industry Partnership – Issues Register- Question 4.a.5) Therefore, the supply of ECG machine will be GST-free at all stages of the supply chain.