ATO Interpretative Decision

ATO ID 2001/363

Goods and Services Tax

GST and leg braces
FOI status: may be released

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Issue

Is the entity, a supplier of medical 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 leg brace?

Decision

Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies a leg brace.

Facts

The entity is a supplier of medical appliances. The entity supplies a leg brace.

The leg brace is a medical aid, which attaches to the upper and lower leg and provides resistance to movements of the knee joint. The purpose of the appliance is to exercise the hamstring muscles and to aid in correcting patellofemoral dysfunctions (knee joint pain, anterior pelvic tilt, etc).

In this case, the leg brace 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, a supply of a medical aid and appliance is GST-free if:

•: it 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);
•: it is specifically designed for people with an illness or disability; and
•: is not widely used by people without an illness or disability.

Item 69 in the table in Schedule 3 (Item 69) lists 'lower limb orthoses'. The terms 'lower limb' and 'orthoses' are not defined in the GST Act.

Generally, where a term is not defined in the relevant Act, it is usually interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a term has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that term relates (Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222).

In this case, given the context in which the terms appears (i.e., in a list of medical aids and appliances), the terms are considered to have a special or technical meaning.

Stedman's Medical Dictionary (2000) defines 'orthoses' as 'an external orthopaedic appliance, as a brace or splint, that prevents or assists movement of the spine or the limbs'. Lower limb is defined to mean 'the hip, thigh, leg, ankle or foot'.

In this case, the leg brace is a medical aid, which attaches to the upper and lower leg and provides resistance to movements of the knee joint.

Therefore, it is considered that the leg brace is a 'lower limb orthoses' as listed in Item 69, as it is designed to be applied to the leg to prevent movement of the knee joint.

The leg brace is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. Therefore, the supply of the leg brace is GST-free under subsection 38-45(1) of the GST Act.

[Note: Items which are merely designed to provide support or raise a limb, rather than being designed to be applied to the body to change or alter position or motion, or prevent movement of the limb, are not orthoses and are not covered by Item 69].

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.

Date of decision: 14 June 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   subsection 38-45(1)
   Schedule 3
   Schedule 3 table item 69

A New Tax System (Goods and Services Tax) Regulations 2019
The Regulations

Case References:
Herbert Adams Pty Ltd v FCT
(1932) 47 CLR 222

Other References:
Stedman TL, Stedmans Medical Dictionary, 27th Edition, Lippincott, Williams & Wilkins, Baltimore 2000

Keywords
Goods & services tax
GST free
GST health
Medical aids & appliances

Siebel/TDMS Reference Number: CW217766

Business Line: Indirect Tax

Date of publication: 29 September 2001

ISSN: 1445-2782

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