ATO ID 2001/365: GST and the supply of an orthopaedic stool (leg rest)
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 stool (leg rest)?

Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies an orthopaedic stool (leg rest). The entity is making a taxable supply under section 9-5 of the GST Act.

Facts
The entity is a supplier of various medical aids and appliances including orthopaedic stools (leg rests). The particular orthopaedic stool (leg rest) in question fits under an orthopaedic chair and is used as an extension of the chair, or can be used as a stool. The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.

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: Of relevance in this case is item 16 in the table in Schedule 3 to the Regulations which lists '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: However, it is considered that an orthopaedic stool (leg rest) does not fall within that item. The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies an orthopaedic stool.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 Division 38 subsection 38-45(1) Division 40 Schedule 3
Case references: Herbert Adams Pty Ltd v FCT (1932) 47 CLR 222
Subject references: Goods and Services tax GST-free GST health Medical aids and appliances Taxable supply