Issue
Is the entity, a supplier of implantable prostheses, 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 implantable joint prostheses to a medical practitioner for use in a surgical procedure?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies implantable joint prostheses to a medical practitioner for use in a surgical procedure. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of implantable prostheses. In this case, the entity is supplying implantable joint prostheses to a medical practitioner for use in a medical procedure.
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 2019 (GST Regulations); and • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.
Implantable joint prostheses are not covered in Schedule 3 and neither are they specified in the GST 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 1: The importation of implantable joint prostheses is a taxable importation under section 13-5 of the GST Act, where the entity imports these 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. Note 2: From 31 October 2005, the supply of an implantable prosthesis to a patient as part of an episode of hospital treatment will be GST-free where the requirements of section 38-20 are satisfied.]
Amendment History
Date of Amendment Part Comment 9 April 2019 Throughout Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 . November 2005 Added Note 2 as a result of an amendment to the definition of 'hospital treatment' in subsection 67(4) of the National Health Act 1953, which applies to section 38-20 of the GST Act. The amendment came into effect on 31 October 2005.
Date of Amendment | Part | Comment
9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 .
November 2005 | Added Note 2 as a result of an amendment to the definition of 'hospital treatment' in subsection 67(4) of the National Health Act 1953, which applies to section 38-20 of the GST Act. The amendment came into effect on 31 October 2005.