ATO Interpretative Decision
ATO ID 2001/149 (Withdrawn)
Goods and Services Tax
GST and wigsFOI status: may be released
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This GST ATO ID is withdrawn on the basis that it is a straight application of the law and does not contain an interpretative decisionThis document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 hair wigs, making a GST-free supply of a medical aid or appliance under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells a wig that is specifically designed for a person with an illness or a disability?
Decision
No, the entity is not making a GST-free supply of a medical aid and appliance under subsection 38-45(1) of the GST Act when it sells a wig which is specifically designed for a person with an illness or a disability. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of wigs. The entity supplies a wig to a person that suffers from an illness that causes total hair loss. The person is allergic to synthetic wigs. Therefore, the wig is specifically designed and manufactured for this individual.
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 will be GST-free where the medical aid or appliance:
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- is covered by Schedule 3 of the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (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.
Wigs are not covered by Schedule 3; nor are they specified in the Regulations. As such, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act.
The entity is registered for GST and the supply meets 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.
Date of decision: 7 June 2001
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
the regulations
Keywords
Goods & services tax
GST free
GST health
Medical aids & appliances
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 7 June 2001 | Original statement | |
| You are here | 24 February 2006 | Archived |