Private ruling: GST-free supplies
Published: 1 September 2025
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are your supplies of Products GST-free supplies of drugs or medicinal preparations under section 38-50 of A New Tax System (Goods and services tax) Act 1999 (GST Act)? | A1: Your supplies of the Products are not GST-free supplies. They are subject to GST.

Relevant facts and circumstances: You are registered for GST. You manufacture and sell certain Products. You purchase raw organic ingredients for all the Products, formulate and manufacture in-house in Australia, and then package and sell the Products under your brand. Your Products are not listed as prescription-only medicines under Schedule 4 and 8 of the Standard of the Uniform Scheduling of Medicines and Poisons (SUSMP). Your Products are not listed as pharmacy medicine under Schedule 2 and pharmacist-only medicine under Schedule 3 of the SUSMP. Your Products are not registered with the Therapeutic Goods Administration (TGA). Your Products are intended for human use, applied topically to the skin. They are not for internal consumption, but are used externally to support muscle recovery, skin health, and relaxation. Your Products are supplied directly to individuals for private and domestic use, primarily for personal wellness, skincare, and pain or stress relief. Your Product is not a sunscreen and does not carry an SPF rating. It is marketed as a hydrating, skin-repairing moisturiser, designed to assist with fine lines, dryness, skin blemishes, and overall skin health. It is not promoted or intended for sun protection, and no SPF claims are made in our marketing materials or on packaging. Your Product is a topical spray used to relieve cramps, joint pain, stress, fatigue, and promote restful sleep. It is applied directly to the skin, where it is rapidly absorbed and utilised by the body.

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 38-50

Reasons for decision: Summary: Under section 9-5 of the GST Act, a supply will be a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (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. In this case, you supply the Products for consideration. This supply is made in the course of your enterprise in Australia, and you are registered for GST. Therefore, you are making a taxable supply under section 9-5 unless it is determined your supply is GST-free in accordance with Subdivision 38-B of the GST Act. There are no provisions in Division 40 of the GST Act that will make this supply 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. A supply of a drug or medicinal preparation will be GST-free where it first satisfies the requirements in subsection 38-50(7) of the GST Act, and also satisfies the requirements contained in at least one of subsections 38-50(1), 38-50(2), 38-50(4), 38-50(4A), 38-50(5) or 38-50(6) of the GST Act. Subsection 38-50(7) of the GST Act provides that the supply of a drug or medicinal preparation is GST-free if and only if: (a) The supply is to an individual for private or domestic use or consumption; and (b) The drug or medicinal preparation is for human use or consumption. As you are selling the Products to individuals for private and domestic use and the Products are for human use, the requirements of subsection 38-50(7) of the GST Act are satisfied. As your sale of Products satisfies subsection 38-50(7) of the GST Act it is now necessary to determine whether your supply of Products satisfies the requirements of at least one of the other subsections in section 38-50 of the GST Act in order to be GST-free. Subsection 38-50(1) of the GST Act provides: (1) A supply of a drug or medicinal preparation 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 ). Paragraph 38-50(1)(a) covers drugs and medicines specified in Schedules 4 and 8 of the SUSMP that are only available on prescription. Many of these products were formerly labelled 'S4' and 'S8' medications. As at the 1 July 2000 it is compulsory to label these products as 'Prescription Medicine' and 'Controlled Drugs', respectively. Paragraph 38-50(1)(b) covers Pharmaceutical Benefits Scheme (PBS) drugs and medicines supplied on prescription as a pharmaceutical benefit within the meaning of Part V11 of the National Health Act 1953 . Based on the information provided, your Products are neither a Schedule 4 nor Schedule 8 medicine therefore, the requirements of subsection 38-50(1) of the GST Act are not satisfied. Subsection 38-50(2) of the GST Act provides: (2) 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 drug or medicinal preparation 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. This covers drugs and medicines that can only be supplied by a medical practitioner, dental practitioner or pharmacist. Many of these products were formerly labelled 'S2' and 'S3' medications. As at 1 July 2000 it is compulsory to label these products as 'Pharmacy Medicine' and 'Pharmacist Only Medicine', respectively. Based on the information provided, your Products are neither a Schedule 2 or Schedule 3 medicine therefore, the requirements of subsection 38-50(2) of the GST Act are not satisfied. Subsection 38-50(3) of the GST Act provides: (3) Subsection (2) does not cover the supply of a drug or medicinal preparation of a kind specified in the regulations. To date, no regulations have been released for the purposes of subsection 38-50(3). Subsection 38-50(4) of the GST Act provides: (4) A supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and: (a) it is supplied as a pharmaceutical benefit (within the meaning of section 91 of the Veterans' Entitlements Act 1986); and (b) it is supplied under an approved scheme (within the meaning of that section). This covers Repatriation Pharmaceutical Benefits Scheme (RPBS) drugs, medicines and other pharmaceutical items supplied under an approved scheme and on prescription as a pharmaceutical benefit within the meaning of section 91 of the Veterans' Entitlements Act 1986 . Based on the information provided, your supplies of the Products do not satisfy the requirements of subsection 38-50(4) of the GST Act. Subsection 38-50(4A) of the GST Act provides (4A) A supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and: (a) it is supplied as a pharmaceutical benefit (within the meaning of section 5 of the Military Rehabilitation and Compensation Act 2004 ); and (b) it is supplied in accordance with a determination made under paragraph 286(1) (c) of that Act. For tax periods starting on or after 1 July 2004, drugs, medicines or other pharmaceutical items will be GST-free when supplied on prescription and as a pharmaceutical benefit under the Military Rehabilitation and Compensation Act 2004. Based on the information provided, your supplies of the Products do not satisfy the requirements of subsection 38-50(4A) of the GST Act. Subsection 38-50(5) of the GST Act provides: (5) A supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is an analgesic that has a single active ingredient the supply of which as a drug or medicinal preparation would be GST-free under subsection (2) if it were supplied in a larger quantity; and (b) the drug or medicinal preparation is of a kind the supply of which is declared by the Health Minister to be GST-free, by determination in writing. This subsection covers supplies of small packet analgesics containing aspirin or paracetamol and intended to be taken by mouth. Small packet analgesics are packets containing less than 25 tablets. For example, small packets of Panadol and Aspirin even where they are sold in supermarkets or general stores. Based on the information provided, your supplies of the Products do not satisfy the requirements of subsection 38-50(5) of the GST Act. Subsection 38-50(6) of the GST Act provides: (6) A supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is the subject of an approval under paragraph 19(1)(a) of the Therapeutic Good Act 1989, and any conditions to which the approval is subject have been complied with; or (b) the drug or medicinal preparation is supplied under an authority under subsection 19(5) of the Act, and the supply is in accordance with any regulations made for the purposes of subsection 19(7) of that Act; or (c) the drug or medicinal preparation is exempted from the operation of Part 3 of that Act under regulation 12A of the Therapeutic Goods Regulations. This subsection applies to supplies of drugs and medicinal preparations which are supplied under the Special Access Scheme (SAS). The SAS allows new drugs and medicinal preparations, which have not yet been approved for supply in Australia, to be supplied to patients who have life-threatening or other serious illnesses. Based on the information provided, your supplies of the Products do not satisfy the requirements of subsection 38-50(6) of the GST Act. As your supplies of the Products do not meet the requirements contained in at least one of subsections 38-50(1), 38-50(2), 38-50(4) 38-50(4A), 38-50(5) or 38-50(6) of the GST Act, it is not a GST-free supply under section 38-50 of the GST Act. Your supplies of the Products meet the positive requirements of section 9-5 of the GST Act and is not input taxed or GST-free. Therefore, your supplies of the Products are taxable supplies and subject to GST.