Private ruling: Goods and services tax (GST) and importation and supply of medical aids and appliances
Published: March 2017

Ruling: Q1: Will your supply of the product be GST-free? | A1: Yes. | Q2: Is your importation of the product a non-taxable importation? | A2: Yes.

Relevant facts and circumstances: You are registered for GST. You have designed and arranged to have the product manufactured by an overseas company and are importing it on a Free on Board basis. You intend to sell the product direct to providers who have clients that require a medical aid product. The product is not to be sold to the wider community. You have arranged for the product to be listed by the Therapeutic Goods Administration on the register of therapeutic goods. You have provided a copy of the register of therapeutic goods entry and a copy of the manuals which details the product. The intended purpose of the product is to enable the person who has temporarily or permanently lost the ability to bear their own weight, to be lifted and transferred. The product comes in different sizes and has various straps and sections. The product is not intended for use and would not be used by the wider community. You have engaged a customs broker who will complete the customs formalities to release the goods from customs as your agents and you have provided a copy of the shipment information. You advised that you will not enter into any agreements with your buyers that your supply of the product will not be treated as GST-free.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 13-10, | A New Tax System (Goods and Services Tax) Act 1999 Section 38-45, | A New Tax System (Goods and Services Tax) Act 1999 Schedule 3, table item 89 and | A New Tax System (Goods and Services Tax) Regulations 1999 Schedule 3 .

Reasons for decision: Detailed Reasoning - Will your supply of the product be GST-free?: Subsection 38-45(1) of A New Tax System (Goods and Services Tax) 1999 (GST Act) provides that a supply of certain medical aids and appliances is GST-free where the medical aid or appliance: ● 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) ● is specifically designed for people with an illness or disability, and ● is not widely used by people without an illness or disability. A medical aid or appliance must meet all three conditions of subsection 38-45(1) of the GST Act to be GST-free. Once an item meets all of the above conditions, then its supply will be GST-free all the way down the supply chain and not only when supplied to a person who has an illness or disability. One exception to this applies, and that is when the supplier and the recipient agree to treat the supply as if it were taxable pursuant to subsection 38-45(3) of the GST Act. | Detailed Reasoning - Schedule 3: Item 89 in the table in Schedule 3 (Item 89) lists 'hoist slings'. Based on the information provided, the product enables the person to be lifted and transferred and is covered by item 89 as a hoist sling. | Detailed Reasoning - Specifically designed for people with an illness or disability: The product has been designed and is intended to enable the person who has temporarily or permanently lost the ability to bear their own weight, to be lifted and transferred. As such, the product is specifically designed for people with an illness or disability. | Detailed Reasoning - Not widely used by people without an illness or disability: Finally, the product is not intended for use and would not be used by the wider community. Having considered the information provided, it is considered the product is not widely used by people without an illness or disability. Therefore, as all three conditions of subsection 38-45(1) of the GST Act have been met, you will be making a GST-free supply of the product. | Detailed Reasoning - Is your importation of the product a non-taxable importation?: An importation is non-taxable under section 13-10 of the GST Act when: ● it is a non-taxable importation under Part 3-2 of the GST Act (Part 3-2 of the GST Act deals with non-taxable importations with reference to the Customs Tariff Act 1995 ); or ● it would have been a supply that was GST-free or input taxed if it had been a supply. As per the reasons provided in question 1, your supply of the product will be GST-free. Therefore, the importation of the product is non-taxable under section 13-10 of the GST Act.