Issue
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 a coronary stent to a hospital?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a coronary stent. The entity is making a taxable supply under section 9-5 of the GST Act when it supplies a coronary stent to a hospital.
Facts
The entity is a supplier of medical appliances. The entity supplies a coronary stent to a hospital.
The coronary stent is a delivery device, which consists of a small self-expanding mesh tube that is placed within a coronary artery. The primary function of the device is to clear and reduce blockages in the arteries.
The entity is registered for goods and services tax (GST). The supplies satisfy 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 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.
A coronary stent is not covered under any of the items listed in the table of Schedule 3 nor is it specified in the GST Regulations. As such, the supply is not a GST-free supply under subsection 38-45(1) of the GST Act.
The entity is registered for GST and the supply satisfies 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 a coronary stent to a hospital. [Note: Where the supply of a coronary stent is not a GST-free supply, the importation of a coronary stent will be a taxable importation which is subject to GST under section 13-15 of the GST Act.]