Is your supply of breast prostheses GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Yes, your supply of breast prostheses is GST-free under subsection 38-45(1) of the GST Act.
You are selling breast prostheses. The breast prostheses are made to aid women, who have had mastectomy surgery, create shape under their clothing.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-45 A New Tax System (Goods and Services Tax) Act 1999 Section 182-10 A New Tax System (Goods and Services Tax) Act 1999 Section 182-15
All legislative references are to the GST Act, unless otherwise stated. Subsection 38-45(1) provides that the supply of 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 specified in the A New Tax System (Goods and Services Tax) Regulations 2019 ; and • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability. Specified in Schedule 3 Item 84 in the table in Schedule 3 (Item 84) lists 'mammary' as a medical aid. Medical aids and appliances Table 1: Medical aids and appliances Item Category Medical aids or appliances 84 Mobility of people with disabilities - physical: prostheses mammary It is considered that the meaning of 'mammary' in Item 84 is intended to be restricted to mammary prostheses. As such, it is determined that the Breast prostheses are covered by Item 84 as mammary prostheses. Specifically designed for people with an illness or disability Paragraph 7 of the Goods and Services Tax Determination 2021/2
Goods and services tax: adjustable beds, pressure management mattresses and pressure management overlays (GSTD 2021/2) discusses that when considering whether a particular product is specifically designed for people with an illness or disability, the following factors are a non-exhaustive list of matters you should take into account: • An objective view of the design features and characteristics of the product indicate whether its essential character is that it is specifically designed for people with an illness or disability. • The designer's or manufacturer's intention of how the particular product is to be used. Indicators of the designer's or manufacturer's intention include an objective consideration of how the product is marketed and the type of outlets at which the product can be purchased. We consider that the breast prostheses are specifically designed for people with an illness or disability as they were designed for use by consumers, mainly women, who were affected by breast cancer and those who had undergone mastectomy surgery and those struggling with breast asymmetry due to an illness or other medical conditions.
Not widely used by people without an illness or disability Paragraphs 8 to 10 of GSTD 2021/2 give guidance on the 'not widely used' test and advise that it is a question of degree whether a product is not widely used by people without an illness or disability. It is considered that it is reasonable to conclude that the test is not satisfied if the product is widely purchased by or on behalf of people without an illness or disability, without the need to examine how this class of people in fact use the product. The following factors are set out in GSTD 2012/2 for the purposes of determining whether adjustable beds are 'not widely used' and is not an exhaustive list, when considering whether a product is widely used by people without an illness or disability: • The product is widely sold in retail or other outlets that predominantly sell standard beds (that is, beds that do not have features specifically designed for people with an illness or disability) to the general public. • The marketing material for the product emphasises how it enhances the lifestyle of people without an illness or disability.
We accept that the common purpose for which the wider community purchases the breast prostheses, is for use by consumers (mainly women) who had undergone a medical procedure such as a mastectomy and/or who were/are affected by breast cancer and the other form of illnesses. In addition, these products are not sold in mainstream stores and advertised for use by anyone in the general community for breast enhancement. Accordingly, as all of the relevant requirements are satisfied under subsection 38-45(1), your supply of the breast prostheses is GST-free. Please note that the supply of the products is GST-free at every point in the supply chain - from manufacturer to consumer.