| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052322689950
Date of advice: 31 January 2025
Ruling
Subject: GST-free health goods
Question 1
Are your supplies of sunscreen products GST-free pursuant to subsection 38-47(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer 1
Your supplies of several of the sunscreen products are GST-free pursuant to subsection 38-47(1) of the GST Act.
Your supplies of the other sunscreen products are not GST-free pursuant to subsection 38-47(1) of the GST Act and are taxable supplies where the requirements of section 9-5 of the GST Act are otherwise satisfied.
This ruling applies for the following period:
DD MM YYYY to DD MM YYYY
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You supply a range of sunscreen products which are for application to the skin, either as lotion or a cream, with a sun protection factor (SPF) of 15 or more. The sunscreen products are required to be included in the Australian Register of Therapeutic Goods (ARTG) under the Therapeutic Goods Act 1989.
Each of the sunscreen products within the range is marketed differently as to distinguish the products from each other.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 38-47
Reasons for decision
Under subsection 38-47(1) of the GST Act, the supply of goods is GST-free where the product is 'of a kind' declared in writing by the Health Minister to be GST-free.
The Health Minister has made the A New Tax System (Goods and Services Tax) (GST-free Health Goods) Determination 2022 (Health Minister's Determination) and declared that for the purposes of subsection 38-47(1) the supply of goods of the following kind is GST-free:
• a sunscreen preparation for dermal application
• has a sun protection factor (SPF) of 15 or more
• required, or in a class of goods required, to be included in the Australian Register of Therapeutic Goods (ARTG) under the Therapeutic Goods Act 1989, and
• is marketed principally for use as a sunscreen.
In your case the sunscreen products are sunscreen preparations for dermal application, that have a SPF of 15 or more, and are required to be included in the ARTG under the TGA. All that leaves to be determined is whether the products are 'marketed principally for use as a sunscreen.'
Whether a sunscreen product is marketed principally for use as sunscreen is a matter of overall impression involving an objective assessment of all the marketing information.
The marketing test is a 'marketed principally' test. It will not be sufficient that the product has some marketing for use as sunscreen. The marketing for use as sunscreen must be the principally marketed use - that is, the product must be marketed 'mainly, chiefly, predominantly or preponderantly' for use as sunscreen.
On balance, it is considered that several of the sunscreen products are not marketed principally for use as sunscreen and therefore are not GST-free under subsection 38-47(1) of the GST Act.
While the other sunscreen products are marketed principally for use as sunscreen and are GST-free under subsection 38-47(1) of the GST Act.