Issue
Is the entity, a supplier of medical aids and appliances, 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 supplies a hearing aid?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a hearing aid.
Facts
The entity is a supplier of medical aids and appliances. In this case, the entity is supplying a hearing aid.
The hearing aid in question is specifically designed for people with an illness or disability; and is not widely used by people without an illness or disability.
There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply.
The entity is registered for goods and services tax (GST).
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 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.
Item 43 of Schedule 3 lists 'hearing aids'. In this case, as the hearing aid is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability; the supply of the hearing aid satisfies the requirements in subsection 38-45(1) of the GST Act.
Therefore, the entity is making a GST-free supply of a hearing aid under subsection 38-45(1) of the GST Act.