GST and bottled oxygen and associated hardware

Is the entity, a supplier of medical 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 medical oxygen bottles and associated hardware?

Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies medical oxygen bottles and associated hardware.

The entity is a supplier of medical appliances. In this case, the entity supplies medical oxygen bottles and associated hardware. The associated hardware is in the form of regulators, flow meters, oxygen cylinder support trolleys, stands, and carry bags, back packs and kits which assist patient mobility by enabling hands-free delivery of medical oxygen to the patient.

The associated hardware is used in conjunction with medical oxygen bottles to deliver medical oxygen to patients.

The medical oxygen bottles and associated hardware are specifically designed for people with an illness or disability and are 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).

Under subsection 38-45(1) of the GST Act, the supply of a medical aid or 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 2019 (GST Regulations); • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.

The only item of relevance to this case is item 135 in the table in Schedule 3 to the GST Act (Item 135). Item 135 lists 'bottled oxygen and associated hardware'.

The phrase 'associated hardware' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that phrase.

The Macquarie Dictionary (1997) defines the word 'associated' to include the following meaning '...anything usually accompanying or associated with another;...' and it defines the word 'hardware' to include the following meaning, 'the mechanical equipment necessary for conducting an activity...'.

Therefore, 'associated hardware' is considered to be mechanical equipment that usually accompanies or is associated with another piece of equipment, in order to conduct a certain activity.

In this case, the hardware is used in conjunction with medical oxygen bottles to supply oxygen to patients. As such, the hardware is also covered under Item 135 as associated hardware for bottled oxygen.

The medical oxygen bottles and associated hardware are specifically designed for people with an illness or disability and not widely used by people without an illness or disability.

As such, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it makes a supply of medical oxygen bottles and associated hardware. [Note: Goods that are associated hardware for the supply of nitrogen, air or gases other than for medical bottled oxygen are not covered by Item 135.]

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 .

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 .