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Edited version of private advice
Authorisation Number: 1051794376892
Date of advice: 6 January 2021
Ruling
Subject: Goods and services tax and ankle braces
Question 1
Is the supply of the ankle brace 1 a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No, the supply of the ankle brace 1 is not a GST-free supply under subsection 38-45(1) of the GST Act. The supply is a taxable supply.
Question 2
Is the supply of the ankle brace 2 a GST-free supply under subsection 38-45(1) of the GST Act?
Answer
Yes, the supply of the ankle brace 2 is a GST-free supply under subsection 38-45(1) of the GST Act.
This ruling applies from:
6 January 20XX
Relevant facts and circumstances
You are registered for goods and services tax (GST). You carry on an enterprise that involves selling ankle braces. You are wanting advice on two specific ankle braces.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1)
Reasons for decision
Under subsection 38-45(1) of the GST Act the supply of a medical aid or appliance is GST-free if:
• It is listed in Schedule 3 to the GST Act or listed in the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations), and
• It is specifically designed for people with an illness or disability, and
• It is not widely used by people without an illness or disability.
Item 69 of Schedule 3 to the GST Act (Item 69) lists 'lower limb orthoses'. It is considered a lower limb orthoses is a device designed to be applied to the body to change or alter position or motion, or prevent movement, of the hip, thigh, leg, ankle or foot for the treatment of an illness or disability to that hip, thigh, leg, ankle or foot.
Ankle brace 1
Ankle brace 1 is a device that is designed to be applied to the body to change or alter position or motion of the ankle and/or foot. In some instances, it may be used to treat someone with a disability of the ankle or foot however the device is targeted towards preventing ankle injuries and in particular in elite athletes. Therefore, whilst it is a device that may fall under Item 69 it is not a device that is specifically designed for people with an illness or disability and it is widely used by people without an illness or disability. As such, the device is not GST-free under subsection 38-45(1) of the GST Act. The supply of the device is a taxable supply under section 9-5 of the GST Act.
Ankle brace 2
Ankle brace 2 is a device that is designed to be applied to the body to change or alter position or motion of the ankle and/or foot by stopping it from rolling out and by pulling the foot up. The product is designed and marketed to people with foot drop and cerebral palsy and it doesn't appear to be marketed as a preventative product. The product is marketed towards people with existing neurological conditions. Therefore, the ankle brace 2 is covered by Item 69 and is specifically designed for people with an illness or disability and not widely used by people without an illness or disability. As such, the supply of the ankle brace 2 is a GST-free supply under subsection 38-45(1) of the GST Act.