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Edited version of private advice
Authorisation Number: 1052322709197
Date of advice: 31 January 2025
Ruling
Subject: GST-free health goods
Question 1
Are your supplies of skincare 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 skincare products are GST-free pursuant to subsection 38-47(1) of the GST Act.
Your supplies of the other skincare 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 skincare 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 skincare products are required to be included in the Australian Register of Therapeutic Goods (ARTG) under the Therapeutic Goods Act 1989.
Each of the skincare 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 skincare 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 skincare.
In your case the skincare products are skincare 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 skincare.'
Whether a skincare product is marketed principally for use as skincare 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 skincare. The marketing for use as skincare must be the principally marketed use - that is, the product must be marketed 'mainly, chiefly, predominantly or preponderantly' for use as skincare.
On balance, it is considered that several of the skincare products are not marketed principally for use as skincare and therefore are not GST-free under subsection 38-47(1) of the GST Act.
While the other skincare products are marketed principally for use as skincare and are GST-free under subsection 38-47(1) of the GST Act.