ATO Interpretative Decision
ATO ID 2005/5
Goods and Services Tax
GST and hospital bed mattresses as pressure management devicesFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 hospital bed mattress that has an in-built layer of convoluted egg crate foam?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a hospital bed mattress that has an in-built layer of convoluted egg crate foam.
Facts
The entity is a supplier of medical aids and appliances. The entity supplies a hospital bed mattress that has an in-built layer of convoluted egg crate foam. The convoluted egg crate foam assists in the even distribution of pressure for patients who may be lying down for prolonged periods, such as patients in a hospital setting.
The mattresses have a PVC cover to prevent penetration of fluids. The cover is either welded shut or may have a zip allowing the cover to be removed. Those mattresses with a zip have a flap over the zip. The mattresses are specifically designed to fit hospital beds and are predominately used in hospitals and nursing homes.
There is no agreement between the entity and the recipient of the supply 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,
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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 66 in the table in Schedule 3 (Item 66) lists 'pressure management mattresses and overlays'. A mattress will be a 'pressure management mattress' where it is designed to provide comfort and prevent bed sores by evenly distributing the pressure exerted by the mattress on the patient's body.
The entity is supplying a hospital bed mattress that has an in-built layer of convoluted egg crate foam forming part of the mattress. The egg crate foam assists in the even distribution of pressure for patients who may be lying down for prolonged periods, such as patients in a hospital setting. As such, the entity's hospital bed mattress is a pressure management mattress, covered by Item 66.
The entity's mattresses have a PVC cover which is either welded or has a covered zip, to prevent bodily fluids from permeating the mattress. The mattresses are designed to fit specifically onto hospital type beds and are predominately used in hospitals and nursing homes where patients may be lying down for prolonged periods. Therefore, the shape and construction of the mattresses are such that the entity's mattresses are specifically designed for people with an illness or disability and not widely used by people without an illness or disability.
As such, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a hospital bed mattress that has an in-built layer of convoluted egg crate foam.
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. |
Year of income: Year ended 30 June 2004
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 66
The Regulation Related ATO Interpretative Decisions
ATO ID 2005/4
Keywords
Goods and services tax
GST-free
GST Health
Medical aids and appliances
ISSN: 1445-2782