ATO Interpretative Decision
ATO ID 2001/472
Goods and Services Tax
GST and mastectomy brasFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 sells a mastectomy bra?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it sells a mastectomy bra.
Facts
The entity is a supplier of medical aids and appliances. The entity sells mastectomy bras.
The mastectomy bra is specifically designed to conceal and hold a mammary prosthesis securely in place.
The bra differs from regular bras and is not widely used by women who have not undergone medical treatment such as a mastectomy or lumpectomy.
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 and 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 1999 (GST Regulations); and
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- is specifically designed for people with an illness or disability; and
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- not widely used by people without an illness or disability.
Item 15 in the table in Schedule 3 to the GST Regulations (Item 15) specifies 'supplements and aids associated with mammary prostheses'.
Generally, where a word or phrase is not defined, it is usually interpreted in accordance with its ordinary meaning unless it has a special or technical meaning. Where a word or phrase has a special or technical meaning, it is necessary to determine the meaning by reference to the industry to which the word or phrase relates (Herbert Adams Pty Ltd V FCT (1932) 47 CLR 222).
It is considered, in consultation with the Pharmaceutical Health Sector, that 'supplements and aids associated with mammary prostheses' include items that are worn to support and conceal mammary prostheses. In this case, the mastectomy bra is specifically designed to conceal and hold a mammary prosthesis securely in place. As such, the mastectomy bra is covered by Item 15.
The bra is specifically designed for people with an illness or disability; and is not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it sells a mastectomy bra.
Date of decision: 27 August 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-45(1)
Schedule 3
Schedule 3 table item 15
Case References:
Herbert Adams Pty Ltd v FCT
(1932) 47 CLR 222
Other References:
GST Pharmaceutical Issues Register - Issue 1b
Keywords
Goods & services tax
GST free
GST health
section 38-45 Medical aids & appliances
ISSN: 1445-2782
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