Goods and Services Tax Industry Issues
Pharmaceutical Health Forum

Spare parts for medical aids and appliances

• Please note that the PDF version is the authorised version of this ruling.
  This publication is extracted from the Pharmaceutical Health Forum - issues register. See issue 1.g of that register. This publication should be read in conjunction with the related content of that register where further context is required.

This publication provides you with the following level of protection: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

What is a spare part for the purposes of subsection 38-45(2)? Are supplies of spare parts for GST-free medical aids and appliances only GST-free when supplied to the person with an illness or disability?

1. A spare part is a part which has been specifically designed to replace a faulty, worn, or broken part of a medical aid or appliance.

2. Spare parts which are specifically designed as spare parts for a GST-free medical aid or appliance, are GST-free at all points in the supply chain. That is, it is not necessary to determine to whom or for what the part is being supplied. Provided the part has been specifically designed to replace a faulty, worn, or broken part of a GST-free medical aid or appliance, the supply of that part will be GST-free under subsection 38-45(2) at all stages of the supply chain.

3. For example, rubber stoppers are generic devices designed for various uses, such as stoppers for the bottom of a steel chair. Therefore as rubber stoppers are not specifically designed for use as a spare part for walking sticks, they are not GST-free as a spare part for a medical aid or appliance.

References