Issue
Is the entity, a supplier of footwear, 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 custom-made surgical footwear?
Decision
Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies custom made surgical footwear.
Facts
The entity is a supplier of footwear. The entity supplies surgical footwear that is custom-made to provide support, and correct, a person's deformed foot.
The custom-made footwear is specifically designed for people with a disability and not widely used by people without disabilities.
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 the GST Act, the supply of certain medical aids and appliances is GST-free where the medical aid or appliance: • is covered by Schedule 3 to the GST Act (Schedule 3) or in the A New Tax System (Goods and Services Tax) Regulations 2019 • is specifically designed for people with an illness or disability, and • is not widely used by people without an illness or disability.
The entity supplies modified surgical footwear that has been modified for a client with a disability. Of relevance to the entity's supply is item 41 in the table in Schedule 3 (Item 41).
Item 41 lists 'surgical shoes, boots, braces and irons'. The phrase 'surgical shoes, boots, braces and irons' is not defined in the GST Act. Therefore, it is appropriate to consider its ordinary meaning. The Macquarie Dictionary (1997), 3RD edition, The Macquarie Library Pty Ltd, New South Wales, defines surgical boot as 'a specially constructed boot or shoe designed to support or correct a deformed foot'.
Accordingly, 'surgical shoes and boots' are shoes or boots designed to support or correct a deformed foot or leg or those designed to be worn to support or protect a foot as a result of surgery.
The entity supplies surgical footwear that is custom-made to provide support, and correct, a person's deformed foot.
Therefore, the custom-made surgical footwear are surgical shoes and are covered by Item 41.
The custom-made surgical shoes are specifically designed for people with a disability and not widely used by people without a disability. Therefore, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies custom-made surgical footwear.
Amendment History
Date of Amendment Part Comment 9 April 2019 Throughout Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 .
Date of Amendment | Part | Comment
9 April 2019 | Throughout | Updated A New Tax System (Goods and Services Tax) Regulations 1999 to A New Tax System (Goods and Services Tax) Regulations 2019 .