Private ruling: GST and supply of appliance for treatment of sleep apnea
Date of advice: 12 October 2015
Published: October 2015

Ruling: Q1: Is the supply of the oral appliance to treat sleep apnea GST-free under subsection 38-45(1) of the A New Tax System (goods and Services Tax) Act 1999 (GST Act)? Advice Yes, the supply of the appliance to treat sleep apnea is GST-free under subsection 38-45(1) of the GST Act at all points in the supply chain. Relevant fact The appliance is designed to treat sleep apnea and is a medical device that is registered and listed with the Therapeutic Goods Administration (TGA). It is an alternative for the treatment of patients with milder obstructive sleep apnea. It can be fitted and adjusted by trained sleep care providers and dentists. Loud or chronic snoring can be associated with a sleep disorder and the oral appliance is a product to reduce snoring. The oral appliance works by a technique called 'mandibular repositioning' in which it advances and holds the lower jaw in a forward position so that the airway is opened at night. It is worn whilst sleeping. This improves breathing and reduces snoring and sleep apnea. Mandibular repositioning to reduce snoring and sleep apnea has been safely prescribed by dentists and physicians for several decades. Since the appliance is adjustable it can be better fitted to the patient to avoid potential problems like temporomandibular joint disorder (TMJ). Unlike other products that lock your jaw into a setting, its design provides micro-calibration to insure against TMJ.


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

Reasons for decision: Summary: Under subsection 38-45(1) of the GST Act, the supply of a medical aid or appliance is GST-free. Subsection 38-45(1) of the GST Act states: (1) A supply is GST-free if: a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability. The supply of the appliance in Australia will be GST-free at all points in the supply chain if it satisfies all the requirements in subsection 38-45(1) of the GST Act. Paragraph 38-45(1)(a) of the GST Act The item in the table in Schedule 3 to the GST Act is of relevance to the supply of the appliance is item 75 - 'mandibular advancement splints'. A 'mandibular advancement splint' is a small device made of plastic or similar material that is worn in the mouth whilst sleeping (similar in appearance to a mouthguard). It is designed to help stop some types of snoring. The splint is designed to push the mandible (lower jaw) forward helping to keep the tongue clear of the pharynx (the back of the throat). The splints are also sometimes used for the treatment of TMJ. The appliance is an alternative for the treatment of patients with milder obstructive sleep apnea which is associated with loud or chronic snoring and is a device that is worn whilst sleeping. It works by a technique called 'mandibular repositioning' in which it advances and holds the lower jaw in a forward position so that the airway is opened at night. This improves breathing and reduces snoring and sleep apnea. In this instance, we consider the appliance is covered by Item 75. The requirement in paragraph 38-45(1)(a) of the GST Act is therefore satisfied. Paragraph 38-45(1)(b) of the GST Act The appliance is used by patients suffering from sleep apnea in order to improve their breathing and reduce snoring. The appliance is therefore specifically designed for people with an illness or disability and is not widely used by people without an illness or disability. The requirement in paragraph 38-45(1)(b) of the GST Act is therefore satisfied. The supply of the oral appliance is GST-free as it satisfies all the requirements in subsection 38-45(1) of the GST Act.