ATO Interpretative Decision
ATO ID 2002/83
Goods and Services Tax
GST and computerised massage cushionFOI status: may be released
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 computerised massage cushion?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a computerised massage cushion. 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 a computerised massage cushion. The entity markets the cushion as a massage device that is designed to alleviate tension and fatigue. The cushion is used for relaxation purposes. The cushion is not designed to assist with the support or positioning of a person with a disability nor is it designed to prevent alleviate some form of disablement.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances 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(GST 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.
Item 87 in the table in Schedule 3 to the GST Act (Item 87) lists 'cushions specifically designed for people with disabilities.'
It is considered that 'cushions specifically designed for people with disabilities' means a cushion with a specifically designed character or function, that has been made or adapted for the purpose of assisting with the support or positioning of an individual with a disability or to prevent or alleviate conditions associated with that disability.
In this case, the entity markets the cushion as a massage device that is designed to alleviate tension and fatigue and is used for relaxation purposes. The cushion is not designed to assist with the support or positioning of a person with a disability nor is it designed to prevent or alleviate some form of disablement. As such, the cushion is not a 'cushion specifically designed for people with disabilities' for the purpose of Item 87.
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 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 a computerised massage cushion.
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
section 9-5
Division 38
subsection 38-45(1)
Division 40
Schedule 3
Schedule 3 table item 87
The Regulations
Other References:
Pharmaceutical Issues Register - Attachment A
Keywords
Goods & services tax
GST free
GST health
Section 38-45 - medical aids & appliances
Taxable supply
ISSN: 1445-2782