Private ruling: Medical aids and appliances
Published: June 2012

Ruling: Q1: Does the supply of a spa bath used for medical therapy purposes meet the specific requirements in the GST Act that provide for certain medical aids and appliances to be GST-free? | A1: No, the supply of a spa bath used for medical therapy purposes does not meet the specific requirements of section 38-45 of the GST Act that provides for certain medical aids and appliances to be GST-free.


Relevant legislative provisions: A New Tax System (goods and Services Tax) Act 1999 (GST Act) section 38-45

Reasons for decision: Summary: You sought advice in relation to waiver of the goods and services tax (GST) applicable to the purchase (or upgrading) of a spa bath to be used for your medical therapy purposes. You have advised that the current customised Spa was purchased some time ago and that you were able to obtain a sales tax exemption at that time. In relation to your request for waiver of the GST, we advise that the Commissioner does not currently have any discretion under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to waive GST on supplies made by registered suppliers to a purchaser (consumer). However, there are provisions in the GST Act to enable suppliers to make some supplies of health goods and services GST-free. In order for the supply of a spa bath used for medical therapy purposes to be GST-free it must meet the specific requirements in the GST Act that provide for certain medical aids and appliances to be GST-free. The GST Act provides that a supply of a medical aid and appliance will be GST-free if all of the following conditions are met: · the supply is covered by Schedule 3 or specified in the GST Regulations; and · the thing 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 a spare part will also be GST-free if it is specifically designed as a spare part for a medical aid or appliance that is GST-free. However, the GST-free treatment does not extend to generic parts that may be used to repair such aids or appliances. Schedule 3 to the GST Act includes a number of products for the mobility of people with disabilities. These include alternative positional seating appliances and standing frames. Items 111 to 122 in Schedule 3 contains a list of specific products for the personal hygiene for people with disabilities which include bath and shower supports, shower trolleys and mobile shower chairs. While these items assist a person in transferring in/out, or positioning in a bath or shower, there is no specific listing in Schedule 3 for baths or spa baths themselves. Item 18 in the GST Regulations lists 'customised modifications for accessories for the aids or appliances mentioned in items 111 to 121 of Schedule 3 of the Act'. Effectively, in order to fall within the scope of item 18 in the GST Regulations, there is a precondition that the items (to which the customised modifications are being made) are themselves listed in Schedule 3 of the GST Act. Therefore, the first requirement for GST-free medical aids and appliances will not be met. A bath or spa bath will generally also fail to meet the second requirement, which provides that the thing must be designed specifically for people with an illness or disability and is not widely used by people without an illness or disability. While we appreciate that there may be therapeutic and other benefits for you (such as improved muscle tone and wellbeing) in using the spa bath as part of your medical therapy regime, we note the following: A 'bath' or 'spa bath' is not listed in Schedule 3 to the GST Act, or in the GST Regulations. Therefore, the supply to you, of a bath or spa bath or spare parts to aid in the refurbishment of a bath or spa bath, will not be GST-free. In determining whether an appliance is a GST-free medical aid or appliance, it is necessary to examine the nature and character of the appliance to establish whether it meets the requirements (as outlined above). Unfortunately, there is no provision in the GST Act for an item to be characterised as a GST-free medical aid or appliance, merely on the basis of an individual's use of that item, despite the fact that such use may provide therapeutic or other health benefits for that person. For you convenience we have attached a copy of our fact sheet that lists all the items covered in Schedule 3 to the GST Act.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: As a result of a motor vehicle accident you became a quadriplegic and consequently confined to a wheelchair. | A custom built spa bath was purchased for your use some time ago and has proven highly beneficial to you in relation to improved muscle tone and well being. You were able to obtain a sales tax exemption at that time. | The spa bath, being old, needs replacing as it is not working. | The original supplier of the spa bath is no longer in business and you have been unable to locate any local manufacturer to build a similar spa bath for you. You have now decided that you will retain the existing spa bath shell and refurbish all the operating parts at a quoted price. | In view of your previous sales tax exemption you now seek a waiver for the GST component of the refurbishment cost. | You note that there is no specific listing of a spa bath as a medical aid under schedule 3 to the GST Act or GST regulations. | In support of your request you have provided a letter from your doctor advising as to the beneficial qualities of the spa bath for your well being.