Issue
Is the entity, a supplier of medical aids and appliances, 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 isotoner gloves?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies isotoner gloves.
Facts
The entity is a supplier of medical aids and appliances. The entity supplies isotoner gloves.
The isotoner gloves are used by people with lymphoedema. The isotoner gloves are designed to compress the hands for therapeutic benefit.
The isotoner gloves are specifically designed for people with an illness or disability and are not widely used by people without an illness or disability.
There is no agreement between the entity and the recipient of the supply that the supply will not be treated as a GST-free supply.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Under subsection 38-45(1) of GST Act, the supply of a medical aid or appliance is GST-free where the medical aid or appliance: • is covered by Schedule 3 to the GST Act (Schedule 3), or specified 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 14 in the table in Schedule 3 to the GST Regulations (Item 14) lists 'compression garments'. Compression garments will be medical aids or appliances when the garments exert sufficient pressure on the wearer to be of therapeutic benefit. They are commonly used by lymphoedema and burn sufferers.
The entity supplies isotoner gloves that are used by people with lymphoedema. The isotoner gloves are designed to compress the hands for therapeutic benefit, therefore, the entity's isotoner gloves fall within the meaning of compression garments and are covered by Item 14.
In addition, isotoner gloves are specifically designed for people with an illness or disability and are not widely used by people without an illness or disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies isotoner gloves.