3.f. What responsibility does a Pharmacist have in regard to subsection 38-50(7)?
This issue is a public ruling for the purposes of section 105-60 of Schedule 1 to the Taxation Administration Act 1953.
Under subsection 38-50 (7) of the GST Act supplies of drugs or medicinal preparations will be GST-free if, and only if:
- the drug or medicinal preparation is for human use or consumption; and
- the supply is to an individual for private or domestic use or consumption.
For the purposes of subsection 38-50(7), it is considered that it is not the responsibility of the Pharmacist to ask each customer the purpose for which they are purchasing the drugs or medicinal preparations. Having said that, the ATO is not prescribing that Pharmacists don't ask questions. A Pharmacist should make whatever enquires he/she feels necessary to satisfy himself/herself that the supply is being made in circumstances where the drugs or medicines are to be used for private and domestic human use or consumption.
Further, where a Pharmacist or their staff members know or reasonably should know that the supply is being made in circumstances where the drugs or medicines are not likely to be used for private and domestic human use or consumption, then the sale should be treated as a taxable supply unless the customer indicates otherwise. For example, where goods are ordered by a business purchase form the supply should be treated as taxable.