Private ruling: GST and therapeutic duvets
Published: October 2014
Ruling period: Year ended 30 June 2015.
Date scheme commenced: The scheme has commenced

Ruling: Q1: Is the supply of therapeutic duvets GST-free? | A1: No.

Relevant facts and circumstances: You are a sole trader. You are the exclusive distributor of two products in Australia. The products are cognitive/sensory aids specifically engineered for the therapeutic benefit of those people with a variety of disabilities and illnesses. The products will be distributed in wellness centres, hospitals, retirement homes and to those individuals suffering with certain illnesses. The products receive a full medical rebate in some other countries. The products in question can be described as similar to a duvet or doona. They are not marketed to or purchased by people without an illness or disability because they are significantly more expensive than other products of their type and due to their excessive weight are not wanted by the general public. You contend that your product fits within a number of items in Schedule 3 to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) namely: • Item 66 - pressure management overlays • Item 87 - cushions designed for people with disabilities You contend that your product also fits within Item 14 of Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 1999 (The Regulations) You also contend that your product fits, more generally in Schedule 3 of the GST Act, under the Category of: Mobility of people with disabilities - physical bedding for people with disabilities

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | Division 38 | subsection 38-45(1) | Division 40 | subsection 182-10(2) | section 182-15 | Schedule 3 | Schedule 3 table item 66 | Schedule 3 table item 82 | Schedule 3 table item 87 | A New Tax System (Goods and Services Tax) Regulations 1999 | The Regulations

Reasons for decision: Summary: Under subdivision 38-B of the GST Act, the supply of specific health related goods and services is GST-free. Under subsection 38-45(1) of the GST Act, the supply of a medical aid or appliance is GST-free where the medical aid or appliance: a) is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (Regulations); b) is specifically designed for people with an illness or disability; and c) is not widely used by people without an illness or disability. You have referred to medical aids and appliances listed in Schedule 3 of the GST Act that is categorised as 'Mobility of people with disabilities - physical: bedding for people with disabilities'. In accordance with section 182-15 of the GST Act, category headings are not an operative part of Schedule 3. As such, the category heading may only be used as an interpretation tool in certain circumstances, for example: • to determine the purpose or object underlying a provision in Schedule 3 (paragraph 182-10(2)(a) of the GST Act); or • where the description of an item listed in Schedule 3 is ambiguous or obscure (paragraph 182-10(2)(c) of the GST Act). | Detailed Reasoning - Item 66 - pressure management mattresses and overlays: Item 66 in the table in Schedule 3 of the GST Act lists 'pressure management mattresses and overlays'. A pressure management mattress is considered to be a mattress designed to provide comfort and prevent bed sores by evenly distributing the pressure exerted by the mattress on the patient's body. The terms 'mattress' and 'overlay' are not defined in the GST Act. Accordingly, it is appropriate to look to dictionary definitions for guidance. The Macquarie Dictionary 3 rd edition defines these terms as: mattress n. a case filled with soft material, often reinforced with springs, used as or on a bed. overlay v. …. n. 5. Something laid over something else; a covering. 6. A layer or decoration of something applied; an overlay of gold. 7. …..' Considering the words in context, it is considered that the word 'overlay' should be taken to mean pressure management overlays that are laid over a mattress. The Macquarie Dictionary 3 rd edition defines the term 'duvet' as a doona. A doona is further defined: noun a quilted bedspread, filled with down, or synthetic padding, and often used instead of top sheets and blankets; continental quilt; duvet. Based on these definitions and common usage of the term, a duvet is not an overlay for a mattress. Accordingly, on this interpretation, the mattress and the overlays referred to in this item do not include duvets. Based on the above definitions, it is considered that a duvet does not fall within the category, 'pressure management mattresses and overlays'. As such, the products under examination, all of which are duvets, do not fall within this item number. | Detailed Reasoning - Item 87 - cushions specifically designed for people with disabilities: The category heading for item 87 specifically lists 'seating aids'. The words of the category heading convey an intention that the cushions should be used by people with a disability requiring support while seated. As such, it is considered that item 87 covers cushions used by people requiring support while seated. Your duvets are used by people primarily for sleep. Most commonly this would be when a person is prone and not seated. Therefore, they are not cushions for the purpose of item 87. | Detailed Reasoning - Item 14 - Physical orthoses - compression garments.: The Macquarie Dictionary 3 rd edition defines the term 'garment' as any article of clothing. Your duvets are used by people primarily for sleep. Most commonly this would be when a person is prone and not seated; it is not a garment. As the duvets are not a mattress, overlay, cushion or a garment for the purposes of the above referred to items, your supply of the products is not GST-free under section 38-45 of the GST Act or any other provision of the GST Act.