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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1012864585644

Date of advice: 21 August 2015

Ruling

Subject: Medical aids and appliances

Question

Is your supply of an adjustable chair GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No, it is not a GST-free supply under section 38-45 of the GST Act.

Relevant facts and circumstances

The entity is a supplier of adjustable chairs. Each chair has a padded back, padded adjustable seat and padded armrests. The entity is registered for goods and services tax (GST).

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 38-45

A New Tax System (Goods and Services Tax) Act 1999 Division 40

A New Tax System (Goods and Services Tax) Act 1999 Schedule 3

A New Tax System (Goods and Services Tax) Regulations 1999 regulation 38-45.01

A New Tax System (Goods and Services Tax) Regulations 1999 Schedule 3

Reasons for decision

Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances is GST-free where the medical aid or appliance is:

    • covered by Schedule 3 to the GST Act, or specified in Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations); and

    • specifically designed for people with an illness or disability; and

    • specifically designed for people with an illness or disability.

Only Parliament - and not the Australian Taxation Office - can add new medical aids and appliances to Schedule 3 to the GST Act or Schedule 3 to the GST Regulations.

Alternative positional seating corner chairs

Schedule 3 to the GST Act lists item 76 to be 'alternative positional seating corner chairs'. Therefore, a supply of an 'alternative positional seating corner chair' is GST-free if the chair is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.

An 'alternative positional seating corner chair' is designed with a corner-shaped back to provide external support for the occupant who has inadequate postural control of the head, neck and/or trunk. This postural control is essential for visual scanning and attending, breathing, speaking and/or eating. The 'alternative positional seating corner chair' is adjustable for seat height.

In this case, the adjustable chairs are not 'alternative positional seating corner chairs' because each chair does not have a corner-shaped back as described above. As such, those chairs are not listed as medical aids and/or appliances in Schedule 3 to the GST Act.

Postural support seating

Schedule 3 to the GST Regulations lists item 16 to be 'postural support seating'. Therefore, a supply of a 'postural support seating' is GST-free if it is specifically designed for people with an illness or disability, and is:

    1. custom made to suit the particular persons anatomical shape in order to provide correct postural support; or

    2. adjustable to such an extent that the product can be customised to the individual's body shape or size in order to provide correct postural support; or

    3. incorporating several of the following design characteristics which will ensure the product provides the necessary postural support for people with an illness or disability:

        i. adjustable in height so as to attain the correct seating position for the requirements of the individual

        ii. adjustable back angle to enable proper support (other than simply reclining) and contain appropriately positioned/shaped back supports

        iii. adjustable or appropriately shaped/sized lumbar support

        iv. side supports

        v. adjustable seat height and depth

        vi. adjustable seat base angle

        vii. calf support

        viii. adjustable shoulder and trunk supports

        ix. footrests specifically designed for injured or disabled persons

        x. swing away arms or removable armrests

        xi. wide arm rests

        xii. integral push handles

        xiii. specifically designed to provide a correct sitting position that results in sitting firmly on the pelvic bones and that aligns and lifts the head, neck and back

        xiv. fitted with wheels, glides or a mobile base suitable for movement of disabled people

        xv. locking brakes

        xvi. suitable hand grips for disabled people

        xvii. specific features to enable people with difficulties in rising to get in and out of the seating

        xviii. pressure reducing cushions.

In this case, the adjustable chairs are not 'postural support seatings' because each chair does not satisfy any one of the three points mentioned above. As such, those chairs are not listed as medical aids and/or appliances in Schedule 3 to the GST Regulations.

Therefore, your supply of a adjustable chair is not GST-free.


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