Private ruling: GST and supply of medical device
Date of advice: 26 October 2017
Published: March 2018

Ruling: A1: Yes. The supply of a medical device is GST-free under subsection 38-45(1) of the GST Act.

Relevant facts and circumstances: ● You are registered for goods and services tax. ● You are launching a new medical device into the Australian Pharmacy sector in December 2017. ● The device is registered and listed with the Therapeutic Goods Administration (TGA).

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 S ubsection 38-45(1)

Reasons for decision: Summary: Under subsection 38-45(1) of the GST Act, the supply of a medical aid or appliance is GST-free. Subsection 38-45(1) of the GST Act provides that a supply is GST-free if it is covered by Schedule 3 (medical aids and appliance) or specified in the regulations and the thing supplied is specifically designed for people with an illness and disability and it is not widely used by people without an illness or disability. The supply of the appliance in Australia will be GST-free at all points in the supply chain if it satisfies all the requirements in subsection 38-45(1) of the GST Act. Paragraph 71 of Class Ruling CR 2013/14 states that the supply is GST-free no matter who makes the supply or who the supply is made to. The item in the table in Schedule 3 to the GST Act is of relevance to the supply of the appliance is item 75 – ‘mandibular advancement splints’. Paragraph 77 of CR 2013/14 explains that a ‘mandibular advancement split’ is a small device made of plastic or similar material that is worn in the mouth whilst sleeping (similar in appearance to a mouthguard). It is designed to help stop some type of snoring. The splint is designed to push the mandible (lower jaw) forward helping to keep the tongue clear of the pharynx (the back of the throat). The splints are also sometimes used for the treatment of temporomandibular joint disorder (TMJ). Based on the facts provided, the device is a mandibular advancement splint and is designed to treat loud or chronic snoring which can be associated with a sleep disorder. This oral appliance works by a technique called “Mandibular repositioning” in which it advances and holds the patients lower jaw in a forward position so that the airway is opened at night. It is worn in the mouth by sleeping and it improves breathing and reduces snoring. We consider that the appliance is covered by Item 75 of Schedule 3 to the GST Act. The device is intended for the use on patients suffering from loud or chronic snoring which can be associated with a sleep disorder. The appliance is specifically designed for people with an illness/ailment or disability and is not widely used by people without an illness or disability. Therefore, the supply of the device satisfies all the requirements of subsection 38-45(1) of the GST Act and will be GST-free at all points in the supply chain.

The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions. | Subject: GST and supply of medical device: Is the supply of a medical device GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?