Goods and Services Tax Industry Issues
Health Industry Partnership

When does a lens become a 'lens for prescription spectacles' for the purposes of subsection 38-45(1) and Item 155 of Schedule 3 of the GST Act?

• Please note that the PDF version is the authorised version of this ruling.
  This publication is extracted from the Health Industry Partnership - issues register. See issue 4.a.15 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.

1. It is considered that partly finished lenses which already have some part of a corrective prescription incorporated in them and have no other use than for finishing and incorporation into prescription spectacles, are significantly identifiable as 'lenses for prescription spectacles' for the purposes of subsection 38-45(1) of the GST Act.

2. Thus, where substrate has some element of a prescription incorporated into it, it will be accepted as being 'lenses for prescription spectacles'. Otherwise, it will be subject to GST.

3. Items which must be further processed prior to taking on the characteristics of a prescription lens (such as pieces of optical plastic which do not have any element of a prescription already incorporated) are not, at that point, considered to be 'lenses for prescription spectacles'. As such, plano lenses will not be GST-free as 'lenses for prescription spectacles' except where an optometrist actually prescribes such a lens for a particular person. It is only at this point, that the supply of the plano lens, can be identified as being a 'lens for prescription spectacles'.

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