Private ruling: GST-Free Medical Aids and Appliances
Published: October 2014

Ruling: Q1: Is the sale of temperature monitoring catheters GST-free? | A1: Yes. The sale of temperature monitoring catheters is GST-free.

Relevant facts and circumstances: You are registered for GST. You are a supplier of medical aids and appliances. You supply a temperature monitoring catheter. The temperature probe is built in to the catheter rather than attached to it. The catheters are specifically designed for people with an illness or disability, and are not widely used by people without an illness or disability.

Relevant legislative provisions: A New Tax System (Goods and Services Tax Act) 1999 (GST Act) Section 9-5 | Section 38-45 | Division 40 | Schedule 3: Item 15 - Continence | Taxation Administration Act 1953 Section 105-65 of Schedule 1

Reasons for decision: Summary: Section 9-5 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act) provides: You make a taxable supply if: (a) you make the supply is 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 Australia; 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) Medical aids and appliances you sell are GST free under subsection 38-45(1) of the GST Act where certain conditions are satisfied. Subsection 38-45(1) of the GST Act 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. Item 15 of Schedule 3 to the GST Act (item 15) includes urine/faecal drainage/collection devices. In order to determine whether the catheter satisfies item 15, it is necessary to consider the meaning of the term 'catheter'. The term is not defined in the GST Act; therefore, the form will take on its ordinary meaning. The Macquarie Dictionary [Online], viewed 15 August 2014, www.macquariedictionary.com.au defines 'catheter' as 'a flexible or rigid hollow tube employed to drain fluids from body cavities or to distend body passages, especially one for passing into the bladder through the urethra to draw off urine'. According to the information you have provided, the catheters with temperature sensors are for the purpose of urinary drainage and simultaneous monitoring of body temperature. It is considered that these catheters fit the dictionary definition of a catheter. In addition to providing urinary drainage, temperature sensing catheters have the added function of being able to provide monitoring of core body temperature for surgical patients. As the temperature sensor is built in to the catheter rather than attached to it the temperature sensor forms part of the overall catheter that you supply. We consider the temperature monitoring catheters are urine collection devices in accordance with item 15 of Schedule 3 to the GST Act. In addition, they are specifically designed for people with an illness or disability, and are not widely used by people without an illness or disability. As all of the requirements of subsection 38-45(1) of the GST Act are satisfied, the supply of catheters in Australia will be a GST-free supply. Medical aids and appliances that satisfy these conditions are GST-free at every point in the supply chain.