ATO ID 2005/88: GST and custom-made surgical footwear
Date of decision: 30 July 2002
Business line: Indirect Tax

Issue
Is the entity, a supplier of footwear, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies custom-made surgical footwear?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies custom made surgical footwear.

Facts
The entity is a supplier of footwear. The entity supplies surgical footwear that is custom-made to provide support, and correct, a person's deformed foot. The custom-made footwear is specifically designed for people with a disability and not widely used by people without disabilities. There is no agreement between the entity and the recipient of the supply that the supply will not be treated as a GST-free supply. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: 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: The entity supplies modified surgical footwear that has been modified for a client with a disability. Of relevance to the entity's supply is item 41 in the table in Schedule 3 (Item 41). Item 41 lists 'surgical shoes, boots, braces and irons'. The phrase 'surgical shoes, boots, braces and irons' is not defined in the GST Act. Therefore, it is appropriate to consider its ordinary meaning. The Macquarie Dictionary (1997), 3RD edition, The Macquarie Library Pty Ltd, New South Wales, defines surgical boot as 'a specially constructed boot or shoe designed to support or correct a deformed foot'. Accordingly, 'surgical shoes and boots' are shoes or boots designed to support or correct a deformed foot or leg or those designed to be worn to support or protect a foot as a result of surgery. The entity supplies surgical footwear that is custom-made to provide support, and correct, a person's deformed foot. Therefore, the custom-made surgical footwear are surgical shoes and are covered by Item 41. The custom-made surgical shoes are specifically designed for people with a disability and not widely used by people without a disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies custom-made surgical footwear.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) Schedule 3 Schedule 3 table item 41
Related ATO interpretative decisions: ATO ID 2005/87 | ATO ID 2005/89 | ATO ID 2005/90 | ATO ID 2005/91
Other references: The Macquarie Dictionary (1997), 3RD edition. The Macquarie Library Pty Ltd, New South Wales
Subject references: Goods and services tax GST free GST health Section 38-45 - medical aids & appliances GST supplies & acquisitions