GST and supply of occlusal splints 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 an occlusal splint 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 an occlusal splint to a dentist. The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a dental laboratory. The entity makes a supply to a dentist of an occlusal splint. The splint for adjusting occlusions is not a mandibular advancement splint.

The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.

Under subsection 38-45(1) of the GST Act, the supply of a medical aid and appliance 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 (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.

Occlusal splints are not covered by Schedule 3 or the GST Regulations. Therefore, 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 when it supplies an occlusal splint. [Note: Section 38-10 of the GST Act provides that, in certain circumstances, supplies of other health services and goods supplied during those health services are GST-free. However, in this case, section 38-10 of the GST Act does not apply to the supply made by the entity to the dentist. Paragraph 38-10(1)(c) of the GST Act requires that the entity provides 'appropriate treatment' to the recipient of the supply. It is considered that appropriate treatment is provided when a recognised professional assesses the recipient's state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that recipient insofar as that recognised professional's particular area of training allows and will include subsequent supplies for the determined process. In this case, the entity is not providing 'appropriate treatment' to the dentist.]