ATO ID 2001/364: GST and the supply of an orthopaedic chair
Date of decision: 23 July 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier of medical aids and appliances, 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 an orthopaedic chair?

Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies an orthopaedic chair.

Facts
The entity is a supplier of various medical aids and appliances including orthopaedic chairs. The orthopaedic chair in this case can be adjusted to suit a person with an illness or disability. It has the following design characteristics: There is no agreement between the entity and the recipient 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: Item 16 in the table in Schedule 3 to the Regulations (Item 16) specifies 'postural support seating'. Postural support seating as listed in Item 16 needs to be a specific type of seating possessing characteristics that satisfies both the description of the item and the use requirement of paragraph 38-45(1)(b) of the GST Act. The phrase 'postural support seating' is not defined in the GST Act. Generally, where a phrase is not defined in the relevant Act, it is usually interpreted in accordance with its ordinary meaning, unless it has a special or technical meaning. Where a phrase has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that phrase relates ( Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222). In consultation with the Health Industry, it is considered that for the purposes of Item 16 and to be a thing that is specifically designed for people with an illness or disability, 'postural support seating' should be: In this case, the orthopaedic chair contains several of the characteristics from element (iii) above. As such, the orthopaedic chair is covered by Item 16 and is specifically designed for people with an illness or disability. In addition, it is not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies the orthopaedic chair.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-45(1) paragraph 38-45(1)(b) Schedule 3
Case references: Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222
Related ATO interpretative decisions: ATO ID 2001/365
Subject references: Goods and Services tax GST-free GST health Medical aids & appliances