ATO ID 2001/656: GST and the importation of insulin
Date of decision: 7 August 2001
Business line: Indirect Tax

Issue
Is the entity, an individual, making a non-taxable importation under section 13-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it imports insulin for its own private use?

Decision
Yes, the entity is making a non-taxable importation under section 13-10 of the GST Act when it imports insulin for its own private use.

Facts
The entity is an individual. The entity visited Australia for business purposes. At the overseas departure point, the entity's hand luggage, including a personal supply of insulin, was misplaced. Once the luggage was located, it was sent to the entity in Australia by courier. Insulin is a drug for human use. The supply of insulin in Australia to individuals for private use is restricted under State and Territory laws such that it can only be made by a pharmacist, medical practitioner, dental practitioner or any other person permitted under that law to do so. The importation of insulin is not a non-taxable importation under Part 3-2 of the GST Act. The goods are imported and are entered for home consumption within the meaning of the Customs Act 1901 .

Reasons for decision
Summary: Under section 13-10 of the GST Act, an importation is a non-taxable importation if: As the importation is not a non-taxable importation under Part 3-2 of the GST Act, it is necessary to determine if, had it been a supply, it would have been GST-free or input taxed. Section 38-50 of the GST Act outlines the circumstances in which the supply of a drug or medicinal preparation is GST-free. Subsection 38-50(7) of the GST Act provides that a supply of a drug or medicinal preparation covered by section 38-50 of the GST Act is GST-free if, and only if: In this case, the supply of insulin to an individual for its own private use satisfies the requirements of subsection 38-50(7) of the GST Act. Therefore, section 38-50 of the GST Act may apply to make the supply of insulin GST-free. Subsection 38-50(2) of the GST Act provides that a supply of a drug or medicinal preparation is GST-free if the supply is to an individual for private or domestic use or consumption and is restricted under a State or Territory law in which it is supplied, but may be made by a medical practitioner, dental practitioner, pharmacist or any other person permitted by or under that law to do so. The focus of subsection 38-50(2) of the GST Act is the drug or medicinal preparation itself and not who is actually supplying it. The supply of insulin in Australia to individuals for private use is restricted under State and Territory laws such that it can only be made by a pharmacist, medical practitioner, dental practitioner or any other person permitted under that law to do so. Therefore, the supply of insulin satisfies subsection 38-50(2) of the GST Act. As such, the supply of insulin to an individual for private use is GST-free under section 38-50 of the GST Act. Therefore, as the supply of insulin would have been GST-free under section 38-50 of the GST Act if the supply had been made in Australia, the entity is making a non-taxable importation under section 13-10 of the GST Act when it imports insulin for its own private use.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 13-10 section 38-50 subsection 38-50(2) subsection 38-50(7)
Subject references: Goods & services tax GST-free GST health Section 38-50 - drugs and medicinal preparations Imports Non-taxable importations