Edited version of your written advice

Authorisation Number: 1051312366858

NOTICE

Revised ruling: This is an edited version of a revised private ruling. It replaces the edited version of the private ruling with the authorisation number 1011795075710.

Date of advice: 1 December 2017

Ruling

Subject: GST and bidets

Question

Is your supply of bidet toilet seat attachments 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)?

Answer

No, your supply of bidet toilet seat attachments is not a GST-free supply of a medical aid or appliance under subsection 38-45(1) of the GST Act.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

● You are registered for GST.

● You supply bidet toilet seat attachments to an entity and are currently treating them as GST-free based on our view from an earlier ruling we issued you.

● The entity is your main customer.

● You acquire bidet toilet seat attachments from various suppliers who currently sell them to you as GST-free as per sample invoices you provided.

● No agreements or information was provided by you to explain why the suppliers are treating it as GST-free.

● You advised that you were unsure whether the bidet toilet seat attachments you sell are specifically designed for people with an illness/disability.

● You don't take physical possession of the bidet toilet seat attachment but acquire it from the supplier then have it delivered straight to the customer and installed for them. You treat the installation as a taxable supply.

Reasons for Decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

Your supplies of bidet toilet seat attachments do not meet all of the criteria to be a GST-free supply of a medical aid or appliance under subsection 38-45(1) of the GST Act.

Detailed reasoning

Asterisked terms are defined in section 195-1 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Subsection 38-45(1) of the 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.

Bidet/bidet toilet attachments are listed under Item 51 of Schedule 3. This can be broken up into:

● bidet attachments, and

● bidet toilet attachments.

It is accepted that the various bidet toilet seat attachments that you supply are covered by Item 51 as they attach to a standard toilet to modify it to a bidet. As such, paragraph 38-45(1)(a) of the GST Act is satisfied.

Not specifically designed for people with an illness or disability

As per issue 1c of the ATO’s Pharmaceutical Health Forum Issues Register available on ato.gov.au, in determining whether a medical aid and appliance is specifically designed for people with an illness or disability reference should be made to the designer’s/manufacturer’s intention of how the good is to be used and its features. Indicators of the designer’s/manufacturer’s intention of how the good is to be used include how the good is marketed and the type of retail outlets at which the good can be purchased.

However, it is how it is designed that is the test. While marketing may be an indicator it is not determinative, particularly where the marketing is carried out by an entity other than the designer or manufacturer. For example, a retailer down the supply chain may have identified a market in respect of people with an illness or disability and as such, structured their marketing campaign around this. However, if the designer did not specifically design the product for use by people with an illness or disability the product will not be GST-free.

After reviewing the information available on bidet toilet seat attachments, it is considered that in general, bidet toilet seat attachments are not specifically designed for people with an illness or disability. Rather, bidet toilet seat attachments are designed to improve hygiene for anyone.

Not widely used by people without an illness or disability

As per issue 1d of the ATO’s Pharmaceutical Health Forum Issues Register available on ato.gov.au, in determining whether a medical aid or appliance is used by people without an illness or disability reference should be made to how the wider community uses the goods. That is, the common purpose for which the goods are purchased.

Subsection 38-45(1) of the GST Act does not require the GST treatment of a medical aid and appliance to be determined by reference to the actual use for which an item is being purchased but rather focuses on the purpose for which the wider community purchases these products.

It is considered that irregular and uncommon use of a medical aid and appliance in a way contrary to its manufactured purpose will not prevent the good from being GST-free.

This is a question of fact and needs to be determined by reference to how a product is used. It is stated in the marketing material on various Australian based web pages that bidets and bidet attachments are not as popular in Australia due to cultural reasons. Therefore, the current majority of the sales in Australia may be to people with an illness or disability. However, bidets and bidet attachments are commonplace in specific overseas countries. The products sold in Australia are the same as the products sold in other countries. When the bidet attachments are considered in the context of the global market place in which they are sold, they are widely used by people without an illness or disability.

The reported current limited popularity within Australia of bidet attachments is due to cultural reasons and not due to the bidet attachment being an item that is primarily used by people that have an illness or disability. To restrict the application of ‘widely used’ to only consider how these products (that are sold globally) are being currently used in Australia, would give an absurd result. Reference to how the product is used in all markets that it is sold is appropriate and provides a true reflection of how the product is used.

Consequently, bidet toilet seat attachments are ‘widely used’ by people without an illness or disability.