Edited version of private advice

Authorisation Number: 1052363378254

Date of advice: 13 March 2025

Ruling

Subject: GST - incontinence pants

Question 1

Is the supply of the incontinence pants for the Product 1 age range (Product 1 pants) GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer 1

No, the supply of Product 1 pants is not GST-free under subsection 38-45(1) of the GST Act.

Question 2

Is the supply of incontinence pants for the Product 2 age range (Product 2 pants) GST-free under subsection 38-45(1) of the GST Act?

Answer 2

Yes, the supply of Product 2 pants is GST-free under subsection 38-45(1) of the GST Act.

Question 3

Is the supply of incontinence pants for the Product 3 age range (Product 3 pants) GST-free under subsection 38-45(1) of the GST Act?

Answer 3

Yes, the supply of Product 3 pants is GST-free under subsection 38-45(1) of the GST Act.

Relevant facts and circumstances

You are registered for goods and services tax (GST).

You carry on an enterprise that involves importing and distributing hygiene and incontinence products.

In particular, you supply incontinence pants for urinary incontinence in the following three age ranges:

•                     Product 1 pants

•                     Product 2 pants

•                     Product 3 pants

You sell Product 1, 2, and 3 pants online or through retail stores.

The Products are advertised as soft and comfortable incontinence pants. Description of the item provided.

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:

(a)           it is covered in Schedule 3 to the GST Act (Schedule 3) or specified in the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations), and

(b)           it is specifically designed for people with an illness or disability and not widely used by people without an illness or disability.

Item 18 in Schedule 3 (Item 18) covers 'disposable/reusable continence pads, pants and nappies required for continence use (excluding nappies for babies, sanitary pads or tampons).' A baby is generally understood to be 12 months of age or younger.

You supply disposable continence pants that are required for continence use in people over the age of 12 months and as such not considered babies. Accordingly, the Product 1, 2, and 3 pants are covered by Item 18 (not having been excluded as nappies for babies) satisfying paragraph 38-45(1)(a) of the GST Act.

The second and third requirements in paragraph 38-45(1)(b) of the GST Act require the Products covered by Item 18 to be specifically designed for people with an illness or disability and not widely used by people without an illness or disability.

Each of the Product 1, 2 and 3 pants is considered separately to determine whether the users of the Product pants for the different age ranges are incontinent because they have an illness or disability or because it is part of the normal developmental process of a user of that age.

Not all incontinence falls within the ordinary meaning of disability. Incontinence will only fall within the ordinary meaning of disability where the condition is caused by a medical issue rather than being part of the normal development/maturation process of the user.

Our research indicates that children seven and older are less likely to be experiencing enuresis and that it is at approximately seven years of age that parents are encouraged to seek medical attention to determine if a child's enuresis is still part of their normal development or if there are other medical reasons causing the child's enuresis. As the medical industry generally doesn't recommend parents seek medical attention for enuresis until approximately seven years of age, it is generally accepted that the majority of children prior to that age experience enuresis because it is part of their normal development/maturity process.

Therefore, the supplies of the Product 1 pants are widely used by people without an illness or disability and as such will not satisfy paragraph 38-45(1)(b) of the GST Act. Accordingly, the supplies of the Product 1 pants are not GST-free under subsection 38-45(1) of the GST Act and are taxable supplies where they otherwise, meet the requirements of section 9-5 of the GST Act.

Whilst it is thought that many users who wear Product 2 and 3 pants don't have an illness or disability, the data is not able to sufficiently support this. On that basis, Product 2 and 3 pants are considered to be specifically designed for people with an illness or disability and not widely used by people without an illness or disability. As such, the supplies of the Product 2 and 3 pants are GST-free under subsection 38-45(1) of the GST Act.