ATO Interpretative Decision
ATO ID 2001/502
Goods and Services Tax
GST and pelvic floor muscle exercise deviceFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
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 a pelvic floor muscle exercise device designed to help women with stress incontinence?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a pelvic floor muscle exercise device designed to help women with stress incontinence.
Facts
The entity is a supplier of medical aids and appliances. In this case, the entity supplies a pelvic floor muscle exercise device.
The pelvic floor muscle exercise device is designed to help women with stress incontinence which is brought about by an overall weakness in the pelvic floor muscles.
The device comprises a number of vaginal cones and a set of weights.
Once the weighted vaginal cone is inserted, the pelvic floor muscles automatically contract to keep the cone in place. This reflex action exercises and strengthens the pelvic floor muscles. The improvement in pelvic muscle tone, which usually takes up to 12 weeks to be realised, results in greater bladder control.
In this case, the pelvic floor muscle exercise device is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.
There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply. The entity is registered for goods and services tax (GST).
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:
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- is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 2019(Regulations); and
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- is specifically designed for people with an illness or disability; and
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- is not widely used by people without an illness or disability.
The only item of relevance to this case is item 20 in the table in Schedule 3 (Item 20). Item 20 lists 'incontinence appliances'.
The pelvic floor muscle exercise device is designed to help women with stress incontinence, and as such, is considered to be an incontinence appliance for the purposes of Item 20.
Additionally, the pelvic floor muscle exercise device is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. As such, the requirements of subsection 38-45(1) of the GST Act are satisfied.
Therefore, the supply of the pelvic floor muscle exercise device designed to help women with stress incontinence, is GST-free under subsection 38-45(1) of the GST Act.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019. |
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3 table item 20
The Regulations
Keywords
Goods and services tax
GST free
GST health
Medical aids and appliances
ISSN: 1445-2782