Does the supply of XXX watches qualify as GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), Schedule 3, item 33 (emergency call systems specifically designed for people with an illness or disability)?
1 Yes.
You are registered for goods and services tax (GST). You supply XXX, a wearable medical alert/SOS device designed specifically for emergency assistance. The XXX targets the elderly, people living alone who require immediate assistance in case of falls or medical emergencies, and those who have reduced mobility or living with a disability. Without an active SIM card and subscription, the XXX screen can still tell the time. Activating the SOS button will also still provide a direct line to 000 without an active SIM card and subscription. Fall detection will still work, also triggering an SOS to 000.
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1)
Under section 9-5 of the GST Act, a supply will be a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with the indirect tax zone; and (d) you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. In this case, you supply the XXX for consideration in the course of your enterprise in Australia. The supply is connected with the indirect tax zone as the supply is made in Australia, and you are registered for GST. There is no provision in Division 40 of the GST Act that are relevant to make this supply input taxed. Therefore, we need to determine whether your supply is GST-free in accordance with Subdivision 38-B of the GST Act. Subsection 38-45(1) of the GST Act provides that the supply of a medical aid or appliance is GST-free if it is: (a) it is covered by an item in Schedule 3 (medical aids and appliances), or specified in the regulations; and
(b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability. The supply of an item that satisfies all the above elements of section 38-45 of the GST Act will be GST-free all the way down the supply chain and not only when supplied to a person with an illness or disability. However, pursuant to subsection 38-45(3) of the GST Act the supplier and purchaser can agree to treat the supply as if it were a taxable supply. In determining whether a medical aid and appliance is specifically designed for people with an illness or disability reference should be made to the designer's or manufacturer's intention of how the good is to be used and its features. Indicators of this intention include how the product is marketed and the types of retail outlets where it is sold. The key test is the design.
Whether a medical aid or appliance is used by people without an illness or disability, reference should be made to how the wider community uses the goods. That is, the common purpose for which the goods are purchased. The GST treatment is not determined by reference to the actual use for which an item is being purchased but rather focuses on the purpose for which the wider community purchases these products. In this case, the XXX is a wearable medical alert/SOS device designed specifically for emergency assistance. It includes features such as: information supplied. The XXX includes lifetime support and remote reprogramming after purchase. It can be programmed with either family-monitoring or professional monitoring. Without an active SIM card and subscription, the XXX screen can still tell the time. Activating the SOS button will also still provide a direct line to 000 without an active SIM card & subscription. Fall detection will still work, also triggering an SOS to 000.
The XXX is marketed for the elderly, people living alone who require immediate assistance in case of falls or medical emergencies, and those who have reduced mobility or living with a disability, many of whom may be receiving aged care services, disability services, or supported living. The XXX can be purchased online. We consider that the XXX is specifically designed for people with an illness or disability, and not widely used by people without an illness or disability. Issue 4.a.8. of the Health Industry Partnership Issues Register considered that a 'medical alert device' is a device that is designed for the purpose of alerting medical/caring personnel or an ambulance service to the fact that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment.
In this case, the XXX is designed for the purpose of alerting caring personnel when a patient with a medical condition, resultant physical or mental difficulties needs immediate assistance. Therefore, the XXX satisfies the meaning of Item 33 in Schedule 3 of the GST Act. Furthermore, as the XXX is designed for people with an illness or disability and is not widely used by people without an illness or disability, subsection 38-45(1)(a) and (b) of the GST Act have been satisfied for a medical aid or appliance to be GST-free. Therefore, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you supply the XXX. Accordingly, the supply of the XXX is not a taxable supply under section 9-5 of the GST Act and you will not be subject to GST on the supply.