Issue
Is the entity, a supplier of surgical instruments, 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 suction devices?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it sells suction devices. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity imports suction devices and sells them to hospitals and medical practitioners.
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.
Reasons For Decision
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 of the GST Act (Schedule 3), or specified in 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.
Suction devices are not covered in Schedule 3 nor are they specified in the Regulations. As such, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act.
The entity is registered for GST and the supply meets 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. [Note: The importation of suction devices is a taxable importation under section 13-5 of the GST Act, where the entity imports the items and enters them for home consumption (within the meaning of the Customs Act 1901 and the importation is not a non-taxable importation under Part 3-2 of the GST Act.]