GST and supply of special trays to a dentist

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 special trays to a dentist?

No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies special trays to a dentist. The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a dental laboratory that supplies goods to dentists. In this case, the entity is supplying special trays to a dentist. Special trays are supplied to a dentist prior to a supply of dentures and artificial teeth. The trays are used to make accurate impressions of a patient's teeth. The supply of a special tray may or may not result in the supply of dentures or artificial teeth.

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 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.

Special trays are not specifically listed in Schedule 3 or the Regulations. Therefore, it needs to be determined whether special trays 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'. Special trays are used by dentists to take an impression of a patient's teeth and can subsequently be used to make dentures or artificial teeth. However, it is considered that the supply of the special tray is a separate supply that occurs before the supply of the dentures and artificial teeth. Therefore, special trays are not covered by Item 30. As such, the supply of special trays from the entity to a 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.