Issue
Is the entity, a supplier of bathroom accessories, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies wash basin accessories that are specifically designed for people with a physical disability?
Decision
No, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies wash basin accessories that are specifically designed for people with a physical disability. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a supplier of bathroom accessories. The entity is supplying a range of bathroom accessories to accompany a wash basin that is specifically designed for people with a physical disability. The accessories include a magnetic soap holder, a tumbler holder and a soap dispenser frame. All of these accessories are also specifically designed for people with a physical disability.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision:
Under subsection 38-45(1) of the GST Act, the supply of a medical aid and appliance is GST-free where the medical aid or appliance: • is covered by Schedule 3 to the GST Act or in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations); • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.
Item 18 in the table in Schedule 3 to the GST Regulations (Item 18) lists 'customised modifications and accessories for the aids and appliances mentioned in items 111 to 121 of Schedule 3 to the GST Act'.
The entity is supplying accessories (a magnetic soap holder, a tumbler holder and a soap dispenser frame) for a wash basin. The wash basin, although specifically designed for people with a physical disability, is not covered by anything listed in items 111 to 121 in the table in Schedule 3 to the GST Act.
As such, the accessories for this wash basin, namely the magnetic soap holder, the tumbler holder and the soap dispenser frame, are not customised modifications and accessories covered by Item 18 despite the fact that these accessories are also specifically designed for people with a physical disability and are not widely used by people without a physical disability.
The first requirement of subsection 38-45(1) of the GST is not satisfied. Therefore, the entity is not making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies wash basin accessories that are specifically designed for people with a physical disability.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under any of the other provisions in Division 38 of the GST Act not input taxed under Division 40 of the GST Act. The entity is making a taxable supply under section 9-5 of the GST Act when it supplies wash basin accessories that are specifically designed for people with a physical disability.