ATO Interpretative Decision

ATO ID 2001/102 (Withdrawn)

Goods and Services Tax

GST and SPF 30+ Lip Balm
FOI status: may be released

This ATO ID was withdrawn on 20 May 2022. The original withdrawal note could be misinterpreted so this additional information has been provided. The reason for withdrawal that should be used is this ATO ID contains a view in respect of a provision of the Sales Tax (Exemption and Classification) Act 1992 that does not apply after the 2006-2007 income year. Despite its withdrawal, this ATO ID continues to be a precedential ATO view after the repeal of the Sales Tax (Exemption and Classification) Act 1992, and in respect of decisions for income years up to, and including, the 2021-2022 income year. The issue addressed in the ATO ID is covered by web guidance.
Note that the original withdrawal notice was "This ATO ID is withdrawn because it contains a view in respect of a provision of the Sales Tax (Exemption and Classification) Act 1992 that does not apply after the 2006-2007 income year. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for income years up to, and including, the 2006-2007 income year. The issue addressed in the ATO ID is covered by web guidance."

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, a supplier of lip balms, making a GST-free supply under subsection 38-47(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells SPF 30+ lip balms that were previously sales tax exempt?

Decision

Yes, the entity is making a GST-free supply under subsection 38-47(1) of the GST Act when it sells SPF 30+ lip balms that were previously sales tax exempt.

Facts

The entity supplies SPF 30+ lip balms that are both flavoured and unflavoured. The lip balms (all flavours) have an Australian Register of Therapeutic Goods number. The lip balms were sales tax exempt before 1 July 2000. The entity is registered for goods and services tax (GST).

There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply under subsection 38-47(2) of the GST Act.

Reasons For Decision

Under subsection 38-47(1) of the GST Act a supply of goods is GST-free if determined as such, in writing, by the Health Minister. For the purposes of subsection 38-47(1) of the GST Act the Health Minister has made GST-free Supply (Health Goods) Determination 2005.

Under this Determination, sunscreen preparations for dermal application that:

•: are marketed principally for use as sunscreen; and
•: have a sun protection factor rating of 15 or more; and
•: under the Therapeutic Goods Act 1989 are included in the Australian Register of Therapeutic Goods, or are goods in a class of goods required to be included in the Australian Register of Therapeutic Goods

are GST-free.

The lip balms have a sun protection factor rating of 30+ and have an Australian Register of Therapeutic Goods number. The issue in this case is therefore whether the lip balms are 'marketed principally for use as sunscreen'.

It is considered that the same interpretation is to be given to the meaning of the phrase 'marketed principally for use as sunscreen' used in subsection 38-47(1) of the GST Act as was given to the phrase 'marketed principally for use as a sunscreen preparation' used in Sales Tax (Exemption and Classification) Act 1992 (Sales Tax Act).

Therefore, sunscreen preparations which satisfy the 'marketed principally for use as a sunscreen preparation' test under the Sales Tax Act will also satisfy the 'marketed principally for use as sunscreen' test used in GST-free Supply (Health Goods) Determination 2005.

The lip balms in question were previously sales tax exempt and therefore satisfied the 'marketed principally for use as a sunscreen preparation' test under the Sales Tax Act. Accordingly they will satisfy the 'marketed principally for use as sunscreen' test used in GST-free Supply (Health Goods) Determination 2005. As the lip balms also satisfy the other remaining requirements of subsection 38-47(1) of the GST Act, their supply is GST-free.

[HISTORY : This ATO ID was amended on 6 June 2007. The amendment was made to update the reference to the current GST-free Supply (Health Goods) Determination. This amendment does not change the decision applied under the previous Determination. Also, the finding that the SPF 30+ lip balms were previously sales tax exempt which meets the 'marketed principally for use as a sunscreen preparation' test for the purposes of the Determination, requires an analysis of the facts and circumstances of each case.]

Date of decision: 29 July 2000

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 38-47(1)

Sales Tax (Exemption and Classification) Act 1992
Sales Tax (Exemption and Classification) Act

Other References:
GST-free Supply (Health Goods) Determination 2005

Keywords
Goods & services tax
GST free
GST health
GST other free health goods

Siebel/TDMS Reference Number: CRS27238

Business Line: Indirect Tax

Date of publication: 12 July 2001

ISSN: 1445-2782

history

	Date:	Version:
	29 July 2000	Original statement
	20 May 2022	Archived
You are here	10 June 2022	Updated withdrawal

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