Private ruling: Goods and services tax (GST) and medical aids and appliances
Published: April 2014

Ruling: Q1: Are supplies of your waterproof mattress protectors, waterproof quilt protectors and waterproof pillow case protectors GST-Free under section 38-45 and items 16 and / or 22 of Schedule 3 of the A New Tax System (Goods and Services tax) Act 1999 (GST Act)? | A1: No. Your supplies of infant sized range of waterproof mattress protectors, waterproof quilt protectors and waterproof pillow case protectors GST-Free under section 38-45 and items 16 and / or 22 of Schedule 3 are not GST-Free under section 38-45 and items 16 and / or 22 of Schedule 3 of the GST Act.

Relevant facts and circumstances: • You are registered for GST. • You have received a prior private ruling from the Taxation Office that your range of waterproof mattress protectors, waterproof quilt protectors and waterproof pillow protectors for adults is GST-free under section 38-45 of the GST Act and Item 16 and Item 22 of Schedule 3 of the GST Act on the basis that these products are specifically designed for people suffering from an illness or disability, and are not widely used by people without an illness or disability. • You also supply a range of infant sized of waterproof mattress protectors, waterproof quilt protectors and waterproof pillow case protectors.

Relevant legislative provisions: A New Tax System (Goods and Services tax) Act 1999 Section 38-45 | A New Tax System (Goods and Services tax) Act 1999 Schedule 3 Items 16 and 22

Reasons for decision: Summary: Subsection 38-45(1) of the GST Act provides that where the elements of that section are satisfied, a medical aid or appliance is GST-free. The elements of subsection 38-45(1) of the GST Act require that the medical aid or appliance be: • covered by an item in Schedule 3 of the GST Act or specified in the regulations to the GST Act; and • specifically designed for use by people with an illness or disability; and • not widely used by people without an illness or disability. The various products in your range of infant sized of waterproof mattress protectors, waterproof quilt protectors and waterproof pillow case protectors come within the description of goods described in Item 16 and item 22 of Schedule 3 of the GST Act. However, for goods to be given GST-free status in this regard as medical aids and appliances, they must also be specifically designed for use by people with and illness or disability and not widely used by people without an illness or disability. It is considered that products intended for use with infants such waterproof mattress protectors, waterproof quilt protectors and waterproof pillow protectors and the like are not specifically designed for use by people with an illness or disability. It is a natural occurrence that babies or infants wet beds, and that normally there is no illness or disability responsible for this event to happen. In other words these types of protectors are used to a large extent (i.e. widely used) by infants/babies without an illness or disability and do not fulfil the requirements of paragraph 38-45(1) (b). Thus the various products in your range of infant sized of waterproof mattress protectors, waterproof quilt protectors and waterproof pillow case protectors do not meet all of the requirements of subsection 38-45(1) of the GST Act. Therefore the supply of these products is not GST-free. As a consequence the supply of these products is a taxable supply under section 9-5 of the GST Act.