Private ruling: GST and adult pants/pilchers
Date of advice: 13 August 2020
Published: September 2020

Ruling: Q1: Is the supply of your products which include adult waterproof pants and pilchers a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, your supply of products which include adult waterproof pants and pilchers is a GST-free supply under subsection 38-45(1) of the GST Act.

Relevant facts and circumstances: You are registered for goods and services tax (GST). You sell a variety of incontinence products. These include adult nappies (washable and disposable), plastic pants, panties and pilchers. The above items are designed for adults who are incontinent because of an illness or disability.

Relevant legislative provisions: Subsection 38-45(1) A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision: Summary: Under subsection 38-45(1) of the GST Act a supply of a medical aid and appliance is GST-free if: · it is listed in Schedule 3 to the GST Act (Schedule 3) or in Schedule 3 to the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations), and · it is specifically designed for people with an illness or disability, and · it is not widely used by people without an illness or disability. Item 18 in the table in Schedule 3 (Item 18) lists 'disposable/reusable continence pads, pants and nappies required for continence use (excluding nappies for babies, sanitary pads or tampons).' It is considered that the pants and pilchers as described in the facts are reusable pants that are required for continence use, in that they are waterproof. Therefore, your products are covered by Item 18. The products are designed for adults who are incontinent because of an illness or disability. Therefore, it is considered that the products are specifically designed for people with an illness or disability. These products are marketed towards people who are incontinent and therefore are not considered to be widely used by people without an illness or disability. As such, the supply of your products is covered by subsection 38-45(1) of the GST Act and is a GST-free supply.