Private ruling: GST and supply of cosmetic treatment to private individuals
Published: May 2015

Ruling: Q1: What is the goods and services tax (GST) status of the supply of cosmetic treatments to private individuals made by you, an Australian company? | A1: From the information received, the cosmetic treatment consists of two parts, one part being the supply of the Product by you to the individual and the other part being the supply of a medical service (consultation and injection of the Product) by you to the individual. Accordingly, you are making two distinct supplies and they are (i) a supply of medical service and (ii) a supply of Product. GST status of the supplies You are liable for GST if you make a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if: (a) you make the supply for consideration; (b) the supply is made in the course of an enterprise that you carry on; (c) the supply is connected with Australia; and (d) you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. All the requirements in section 9-5 of the GST Act must be satisfied for a supply to be a taxable supply. Supply of medical service From the information received, you do not receive any payment (consideration) for the consultation and injection of the Product to the individual. You therefore do not satisfy the requirement of paragraph 9-5(a) of the GST Act. Accordingly, all the requirements in section 9-5 of the GST Act are not satisfied and GST is therefore not applicable to your supply of a medical service to the individual. Supply of Product From the information received, you satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act when you supply the Product to the individuals. There is no provision in the GST Act that makes your supply of Product input taxed. GST-free Relevant to the supply of Product is section 38-50 of the GST Act which outlines the circumstances in which the supply of a drug or medicinal preparation will be GST-free. The supply of the Product is GST-free where: • it first satisfies the requirements in subsection 38-50(7) of the GST Act, and • satisfies the requirements contained in at least one of subsections 38-50(1), 38-50(2), 38-50(4), 38-50(5) or 38-50(6) of the GST Act. Subsection 38-50(7) of the GST Act Subsection 38-50(7) of the GST Act provides that a supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is for human use or consumption; and (b) the supply is to an individual for private or domestic use or consumption. In this case you satisfy the requirements in subsection 38-50(7) of the GST Act as: (a) the Product is a drug and is for a human use; and (a) the supply of the drug is made to an individual for private use or consumption. Subsection 38-50(2) of the GST Act Subsection 38-50(2) of the GST Act provides that a supply of a drug or medicinal preparation is GST-free if, under a State law or a Territory law in the State or Territory in which it is supplied, the supply of the product to an individual for private or domestic use or consumption is restricted, but may be made by: (a) a medical practitioner, dental practitioner, or pharmacist; or (b) any other person permitted by or under that law to do so. An item listed in Schedule 4 of the SUSDP (restricted drug) is covered by this subsection if supplied by a medical practitioner. In this instance, Product is listed in Schedule 4 of the SUSDP and therefore, your supply of the Product to the individual in the course of the cosmetic treatment satisfies paragraph 38-50(2)(a) of the GST Act. Accordingly, your supply of the Product to the individual is a GST-free supply under section 38-50 of the GST Act. Summary Your supply of cosmetic treatments to the private individuals is GST-free. | Q2: If the injection of the Product is not billed separately, how do you account for this supply in the tax invoice? | A2: As discussed in question 1 your supply of cosmetic treatment is GST-free and therefore your tax invoice will indicate that no GST has been paid for this supply. How to set out the information on your tax invoice is a business decision. The enclosed fact sheet 'How to set out tax invoices and invoices' may be of assistance to you.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are an Australian company and registered for GST. You supply cosmetic treatments to private individuals that involve the supply and injection of Product at the same time. You operate by employing a number of medical practitioners as employees to prepare and administer the treatments . A Medicare benefit is not payable for the treatment. The individual is required to undergo a consultation prior to performing the treatment(s) in order to ensure the individual is a suitable candidate and understands the treatment to be performed. The consultation is considered to be an essential part of the treatment and is performed by a medical practitioner. It is a free consultation with no obligation to proceed with the treatment. The individual selects the treatment they would like to have and is charged a specific single fee for the selected treatment. The fee for the cosmetic treatment is calculated on the amount of Product injected. The injection of the Product is performed by a registered medical practitioner and no fee is charged for the injection of the Product. The Product supplied during the treatment is a prescription drug. The Product is a 'S4' medication that is, a drug specified in Schedule 4 of the 'Standard for the uniform Scheduling of Drugs and Poisons' (SUSDP). The individuals cannot purchase the Product only. The Product can only be supplied to the doctors.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5; and | A New Tax System (Goods and Services Tax) Act 1999 Section 38-50.


NOTICE: This private ruling was revised following issue. This edited version has therefore been replaced with the edited version of the private ruling with the authorisation number 1012914397929