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Edited version of your written advice
Authorisation Number: 1013009400863
Date of advice: 13 May 2016
Ruling
Subject: GST and the supply of mattresses specifically designed for a medical aid
Question
Is the supply of the electronically operated adjustable bed bases together with the mattresses that are specifically designed to be used on these adjustable bed bases a GST-free supply under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when sold as a single complete unit?
Answer
Yes, the supply is a GST-free supply under section 38-45 of the GST Act where the bed base is sold together with the mattress as a single complete unit because of the following reasons.
Subsection 38-45(1) of GST Act states:
A supply is GST-free if:
(a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and
(b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability.
The electronically operated adjustable bed bases that you supply are specifically designed for people with an illness or disability. The issue here is determining whether a mattress that is specifically designed to be used on an electronically adjustable bed base forms part of a bed and accordingly the bed unit comes within item 60 of the table in Schedule 3 to the GST Act (Schedule 3) that lists 'electronically operated adjustable beds'.
The Macquarie Dictionary, 1997, 3rd edition, The Macquarie Library Pty Ltd NSW, defines the word 'bed' to mean, amongst other things, ' 1. a piece of furniture upon which or within which a person sleeps. 2. the mattress and bedclothes together with the bedstead. 3. the bedstead alone. 4 ...' Therefore, 'bed' could mean the frame and mattress or the frame only.
The context within which the word 'bed' is used in item 60 does not suggest that 'bed' should be given its more restrictive meaning. Therefore, the word 'bed' as used in item 60 refers to both the bed frame and its mattress. Given the fact that the mattresses that are sold with the electronically adjustable bed bases are specifically designed to be used with these beds, in the context within which the word 'bed' is used in item 60, we are of the view that for the purpose of item 60, a mattress forms part of the bed.
Accordingly, when sold as a single complete bed unit, provided that these beds are not widely used by people without an illness or disability, the supply of the electronically adjustable bed bases together with the mattresses that are specifically designed for people with an illness or disability is a GST-free supply under section 38-45 of the GST Act.
Relevant facts and circumstances
You are a furniture and bedding company that is registered for GST in Australia.
You will be selling an electronically adjustable bed base and a mattress that is specifically designed for these bed bases as a single unit (bed unit).
These beds and mattresses are specifically designed for people with an illness or disability.
It is expected that the bed unit will not be widely used by people without an illness or disability.
Relevant legislative provisions
Section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999