1011549555809 | Legal database

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Edited version of private ruling

Authorisation Number: 1011549555809

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Ruling

Subject: GST and 'adaptive clothing'

Questions

Is your supply of 'adaptive clothing', GST-free?

Is your importation of 'adaptive clothing' a non-taxable importation?

Answers

No, your supply of 'adaptive clothing' is not GST-free. It is a taxable supply.

No. Your importation of 'adaptive clothing' is a taxable importation under the GST Act.

However, you will need to contact the Australian Customs Service to ascertain whether your importation of the 'adaptive clothing' is a non-taxable importation under the Customs Tariff Act 1905.

Relevant facts and circumstances

You are registered for GST.

Your products are specifically designed for people with an illness or disability and are not used widely by people without an illness or disability. These products are widely used overseas.

'Adaptive clothing' is conventional clothing that has been modified to enable easier dressing for people with disabilities. The modifications to the garments are varied and are worn by people with disabilities who cannot dress themselves, and require a carer to assist them to dress or undress.

You have provided details of modifications carried out.

You have also provided a list of benefits for the 'adaptive clothing':

Reasons for decision

Question 1

Section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that a supply is GST-free if:

· it is covered by Schedule 3 of the GST Act (medical aids and appliances), or specified in Schedule 3 of regulation 38-45.01(1) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations), and

· the thing supplied is specifically designed for people with an illness or disability and not widely used by people without an illness or disability.

Schedule 3 of the GST Act and Schedule 3 of regulation 38-45.01(1) of the GST Regulations lists a number of medical aids and appliances which are used by people with various illnesses and disabilities.

Items 28 to 33 of Schedule 3 of the GST Act provide items under the Category 'Daily living for people with disabilities. There are no products listed in the Schedules that are in any way similar to your 'adaptive clothing' or any other clothing.

As there are no items in Schedule 3 of the GST Act or GST Regulations that include items of clothing similar to your 'adaptive clothing', this requirement will not be met. Therefore, the supply of your 'adaptive clothing' is not GST-free.

Question 2

GST is payable on imported goods where the importation of the goods is a taxable importation. Under section 13-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) you make a taxable importation when:

· goods are imported, and

· you enter the goods for home consumption (within the meaning of the Customs Act 1901)

However, the importation is not a taxable importation to the extent that it is a non-taxable importation.

Under section 13-10 of the GST Act, an importation is a non-taxable importation if:

· it is a non-taxable importation under Part 3-2 of the GST Act; or

· it would have been a supply that was GST-free or input taxed if it had been a supply.

The importation of clothing, including 'adaptive clothing' does not qualify as a non-taxable importation under paragraph 13-10(b) of the GST Act as it is not a GST-free supply. Further 'adaptive clothing' is not an input taxed supply under the GST Act or any other act.

In order for the 'adaptive clothing' to qualify as a non-taxable importation under Part 3-2 of the GST Act, it will need to qualify as a non-taxable importation under subsection 42-5(1) of the GST Act which provides for certain provisions governing non-taxable importation under the Customs Tariff Act 1905. For these provisions to apply to your importations, you will need to seek the advice of the Australian Customs Service.

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