Private ruling: GST classification of medical aids

Ruling: You are registered for Goods and Services Tax (GST). | You intend to import a number of products into Australia that will be for resale | The products are used as medical aids. | You contend that the products are similar to your competitors that are exempt from GST.



Reasons for decision: Summary: A supply is taxable when it satisfies section 9-5 of the GST Act. This section provides that you make a taxable supply if: (a) 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 for required to be registered However the supply is not a taxable supply to the extent that it is GST free or input taxed. The supply of the products is not input taxed under any provision of the GST Act. Under subsection 38-45(1) of the GST Act, a supply of a medical aid and appliance will be GST-free if the three following criteria are met: 1. the supply is covered by the description contained in an item listed in Schedule 3 or is specified in the GST Regulations; 2. the thing supplied is specifically designed for people with an illness or disability; and 3. it is not widely used by people without an illness or disability Where all three of these criteria are satisfied the thing supplied will be GST-free as a medical aid or appliance at all stages in the supply chain. The items which may be relevant to your products are listed in Schedule 3 to the Regulation 38-45.01. Accordingly, it is considered that the products we have specified to you will be GST-free provided they are specifically designed for people with an illness or disability and are not widely used by people without an illness or disability. With regard to specified items of Schedule 3 to Regulation 38-45.01 it is considered that the third column is ambiguous. We have outlined to you our reasoning for this. Based on the descriptions provided in the manufacturer's web site we find that some of the products to be covered by an item of schedule 3 of the GST Regulations. The other product is covered by another item of schedule 3 of the GST Regulations. As they are used for specifically designed for people with an illness or disability; and are not widely used by people without such afflictions, the products are GST-free as medical aids under subsection 38-45(1) of the GST Act.

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