Issue
Is the entity, a supplier of medical aids and 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 earplugs for swimming?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act, when it supplies earplugs for swimming. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of medical aids and appliances. The entity supplies ear plugs for swimming (swimming plugs).
The entity is registered for the goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of GST Act.
Reasons for Decision
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 1999 (GST Regulations); • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.
Swimming plugs are not covered by Schedule 3 or listed in the GST Regulations. Therefore, the supply of swimming plugs is not GST-free 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 any other provisions of 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 earplugs for swimming.