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Edited version of your written advice
Authorisation Number: 1013134075572
Date of advice: 1 December 2016
Ruling
Subject: Recliner chairs
Question 1
Are you making a GST-free supply when you supply electronically operated recliner chairs that are specifically designed to provide massage for people with disabilities?
Answer
Yes
Question 2
Is your importation of electronically operated recliner chairs a non-taxable importation?
Answer
Yes
Relevant facts and circumstances
You import electrically operated recliner chairs.
These recliner chairs have been specifically designed for people with an illness or disability and are not widely used by people without an illness or disability.
These recliner chairs are provided to customers through a variety of channels including wholesale and direct retail to customers.
The recliner chairs are electronically operated and provide a massage that simulates techniques used various therapists and healthcare professionals.
Each of the recliner chairs provides customised massage through a remote control using automatic programs or manual settings.
The recliner chairs are specifically designed to provide massage for people with disabilities and illnesses such as:
● chronic or recurrent pain or discomfort that restricts everyday activities
● incomplete use of arms or fingers
● difficulty gripping or holding things
● incomplete use of feet or legs
● restriction in physical activities or in doing physical work
● nervous or emotional condition that restricts everyday activities
● mental illness or condition requiring help or supervision.
Functions of the recliner chairs include but are not limited to muscle rolling, kneading, and other various massage.
Each chair is a recliner chair.
Each chair is electronically operated.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 38-45 and
A New Tax System (Goods and Services Tax) Act 1999 13-10.
Reasons for decision
Question 1
Detailed reasoning
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 (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)
● is specifically designed for people with an illness or disability, and
● is not widely used by people without an illness or disability.
Item 86 in the table in Schedule 3 (Item 86) lists 'electrically operated lounge/recliner chairs specifically designed for people with disabilities'. The recliner chair is not designed for general massage, but rather, it is designed to provide massage for people with disabilities. The recliner chair is electronically operated and provides a massage that simulates techniques used by various therapists, and other healthcare professionals. As such, the recliner chair is specifically designed for people with disabilities and is covered by Item 86.
Furthermore, the recliner chair is not widely used by people without an illness or disability. Therefore, as all of the requirements of subsection 38-45(1) of the GST Act have been met, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you supply a home massage recliner chair that is designed to provide massage for people with disabilities.
Question 2
Detailed reasoning
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; or
● it would have been a supply that was GST-free or input taxed if it had been a supply.
As the importation is not a non-taxable importation under Part 3-2 of the GST Act, it is necessary to determine if, had it been a supply, it would have been GST-free or input taxed.
As per Question 1, you are making a GST-free supply under subsection 38-45(1) of the GST Act. This means that the importation of the recliner chairs is a non-taxable importation because the importation satisfies the requirements of section 13-10 of the GST Act.