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Is the entity, a supplier of health care products, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells a pregnancy test kit to a health professional?

No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it sells a pregnancy test kit to a health professional. The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a supplier of health care products. In this case, the entity is selling a pregnancy test kit to a health professional.

The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.

Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances will be 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 (Regulations); and • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.

Pregnancy test kits are not covered by Schedule 3 or the Regulations. Therefore, the supply of the pregnancy test kit is not GST-free under subsection 38-45(1) of the GST Act.

The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it sells a pregnancy test kit. [Note: [1] Under section 38-47 of the GST Act, the Health Minister may, by determination in writing, declare the supply of certain health goods to be GST-free. To date, the Health Minister has not made a determination in relation to pregnancy test kits. [2] In this case, the entity is making a supply to a health professional. Under section 38-50 of the GST Act, a supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and certain other conditions are satisfied (subsection 38-50(4) of the GST Act). However, the product is only GST-free under section 38-50 of the GST Act if, and only if, the product is for human use or consumption and the supply is to an individual for private or domestic use or consumption.]