Issue
Is the entity, a dental laboratory, 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 inlays, onlays and overlays to a dentist?
Decision
No, the entity is not making GST-free supply under subsection 38-45(1) of the GST Act when it supplies inlays, onlays and overlays to a dentist. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a dental laboratory that supplies goods to dentists. In this case, the entity is suppling inlays, onlays and overlays to a dentist. Inlays, onlays and overlays fill or coat a natural tooth restoring its form and function.
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 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 (Regulations); and • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.
Inlays, onlays and overlays are not specifically listed in Schedule 3 or the Regulations. Therefore, it needs to be determined whether they are covered by any of the items in Schedule 3 or the Regulations. The only item of relevance to this case is item 30 in the table in Schedule 3 to the GST Act (Item 30) which lists 'dentures and artificial teeth'. Inlays, onlays and overlays fill or coat a natural tooth to restore its form or function. They are not part of a denture or an artificial tooth. Therefore, inlays, onlays and overlays are not covered by Item 30. As such, the supply of inlays, onlays and overlays from the entity to the dentist is not GST-free 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 supply is a taxable supply under section 9-5 of the GST Act.