Issue
Is the entity, an audiologist, making a GST-free supply under subsection 38-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies swimming plugs to a patient during a GST-free health service?
Decision
Yes, the entity is making a GST-free supply under subsection 38-10(3) of the GST Act, when it supplies swimming plugs to a patient during a GST-free health service.
Facts
The entity is an audiologist. The entity is supplying a health service that is GST-free under subsection 38-10(1) of the GST Act.
During the GST-free health service, the entity supplies and fits a patient with swimming plugs. The fitting takes place on the premises. The entity customises the plugs for the treatment of an illness or disability of the patient.
Swimming plugs are not GST-free medical aids or appliances under subsection 38-45(1) of the GST Act.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Subsection 38-10(3) of the GST Act provides that a supply of goods is GST-free if: • it is made to the person in the course of supplying to the person a service which is GST-free under subsection 38-10(1) of the GST Act; and • it is made at the premises at which the service is supplied.
The swimming plugs are supplied at the premises where the GST-free health service is provided. Therefore, it needs to be determined whether the swimming plugs are supplied in the course of supplying the GST-free health services.
The phrase 'in the course of supplying to the person a service', in the context of subsection 38-10(3) of the GST Act, requires the goods to be supplied at the same point in time at which the GST-free health service is supplied. In addition, the goods must be: • customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free health service; or • necessarily utilised as an integral part of the patient's treatment, required immediately during that specific consultation.
The swimming plugs are supplied at the same point in time at which the GST-free health service is supplied, and are customised for the exclusive treatment of the illness or disability of the particular patient receiving the GST-free audiology service.
Accordingly, the swimming plugs are supplied 'in the course of supplying' a GST-free health service.
Therefore, as the supply of swimming plugs is made 'in the course of supplying' the GST-free health service, it satisfies the requirements in subsection 38-10(3) of the GST Act. As such, the entity is making a GST-free supply under subsection 38-10(3) of the GST Act, when it supplies swimming plugs to a patient during a GST-free health service.