Edited version of private advice

Authorisation Number: 1052257311645

Date of advice: 2 July 2024

Ruling

Subject: GST and injectables

Question 1

Is your supply of injectables a GST-free supply under section 38-50 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, the supply of injectables is a GST-free supply.

Question 2

Is your supply of administering injectables a taxable supply for the purposes of section 9-5 of the GST Act?

Answer

Yes, the supply of administering injectables is a taxable supply.

Question 3

Is your proposed apportionment methodology to determine the GST payable on your provision of injectable services to your clients fair and reasonable

Answer

Yes.

Relevant facts and circumstances

You are registered for goods and services tax (GST).

Your clinics make supplies including Injectables.

In making the supply of the injectables, there is both the product component of the supply (being the injectable solution and medicine itself); as well as the service component of the supply (being the act or effort of administering the solution and medicine).

The injectables provided by you to your clients are listed as prescription-only medicines under Schedule 4 of the Standard of the Uniform Scheduling of Medicines and Poisons (SUSMP).

You have provided a list of injectables that you supply to your clients.

Your clients receive the injectables for relevant reasons rather than for medical, reconstructive or therapeutic reasons. The clients are all un-registered, private individuals.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-75

A New Tax System (Goods and Services Tax) Act 1999 section 9-80

A New Tax System (Goods and Services Tax) Act 1999 section 38-7

A New Tax System (Goods and Services Tax) Act 1999 section 38-47

A New Tax System (Goods and Services Tax) Act 1999 section 38-50

Detailed reasoning

In this ruling,

• unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

Under section 9-5 a supply will be a taxable supply where all the following requirements are met:

a) the supply is made for consideration

b) the supply is made in the course or furtherance of an enterprise that the supplier carries on

c) the supply is connected with the indirect tax zone and

d) the supplier is registered or required to be registered.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

The supplies made you will be taxable supplies unless there is another provision in the GST Act that makes those supplies GST-free or input taxed. There are no provisions in the GST Act that would make these supplies input taxed. The relevant GST provisions under which supplies could be GST-free are considered further in the detailed reasoning of Question 1 and Question 2.

Reasons for decision

Question 1

Section 38-50 outlines when a supply of drug or medicinal preparations is GST-free.

Of relevance to the supply of injectables is subsection 38-50(1) which states that a supply of a drug or medicinal preparations is GST-free if the supply is on prescription and:

(a) under a State law or a Territory law in the State or Territory in which the supply takes place, supply of the drug or medicinal preparation is restricted, but may be supplied on prescription; or

(b) the drug or medicinal preparation is a pharmaceutical benefit (within the meaning of Part VII of the National Health Act 1953).

However, a supply of a drug or medicinal preparation can only be GST-free under section 38-50, 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 (subsection 38-50(7)).

The drug or medicinal preparations you provide are for human use or consumption and the supplies are made to individuals for private or domestic use or consumption. As a result requirements of subsection 38-50(7) are satisfied.

From the facts provided, all the injectables are listed as prescription-only medicines under Schedule 4 of the SUSMP.

The SUSMP also known as Poisons Standard is a legislative instrument that consists of decisions regarding the classification of medicines and poisons into Schedules which are generally adopted for inclusion in the relevant legislation of the States and Territories. Schedule 4 of the SUSMP lists prescription-only medicines.

This means that the supplies of the injectables are restricted under a State law or a Territory law in the State or Territory in which the supply takes place as prescription-only medicines.

As a result, the requirement of subsection 38-50(1) is met. Your supply of the injectables are GST-free supplies as the requirements of both subsection 38-50(1) and subsection 38-50(7) are met.

Question 2

Detailed reasoning

The supply of administering injectables will be a taxable supply under section 9-5 unless the supply is GST-free. Subsection 38-7(1) provides that a supply of medical service is GST-free. However, under subsection 38-7(2), supply of a medical service is not GST-free under subsection (1) if:

•         it is a supply of a professional service rendered in circumstances covered by a prescribed provision of

regulations made under the Health Insurance Act 1973; or

•         it is rendered for relevant reasons and is not a professional service for which medicare benefit is payable under Part II of the Health Insurance Act 1973.

Medical service is defined in section 195-1 as:

(a) a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; or

(b) any other service supplied by or on behalf of a medical practitioner or approved pathology practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

The administration of injectables by you does not qualify for a Medicare benefit.

However, administration of injectables is a service that is supplied by or on behalf of a medical practitioner that is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

In your circumstances, the initial consultation is performed by a medical practitioner (doctor) the administration of the injectable is performed either by a qualified injector (either a nurse or a doctor being a person permitted by law). When a qualified nurse is performing the administration of injectables the nurse would be doing so on behalf of the medical practitioner.

As a result, administration of injectables satisfies the second limb of the definition of 'medical service' in section 195-1 as it is provided by or on behalf of the medical practitioner and is generally accepted in the medical profession as being necessary for the appropriate treatment of the recipient of the supply.

However, paragraph 38-7(2)(b) states that a medical service will not be GST-free if the service is rendered for relevant reasons and is not a professional service for which medicare benefit is payable. Administration of injectables is a service for which no medicare benefit is payable and it is also a service that is rendered for relevant reasons.

As a result, the supply of administration of injectables is not GST-free but is a taxable supply under section 9-5.

Question 3

Detailed reasoning

There do not appear to be any distortive factors in the proposed methodology and the Commissioner accepts that it is a fair and reasonable method.

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