Goods and services tax: supplies of sunscreen

This Determination explains our view on when a supply of a sunscreen product is GST-free.

This view in this Determination replaces those in 2 product classification issues listed in the Pharmaceutical Health Forum – issues register. [1] Both publications were public rulings for the purposes of the Taxation Administration Act 1953. Our view in this Determination is consistent with those expressed in the issues register.

This Determination contains an Appendix that outlines a compliance approach on whether a sunscreen product is required, or in a class of goods required, to be included in the Australian Register of Therapeutic Goods (ARTG).

All legislative references in this Determination are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), unless otherwise indicated.

Under subsection 38-47(1), a supply of goods is GST-free where the product is 'of a kind' declared in writing by the Health Minister to be GST-free.

A New Tax System (Goods and Services Tax) (GST-free Health Goods) Determination 2022 (Health Minister's Determination) [2] declares that for the purposes of subsection 38-47(1), goods are GST-free if they are of a kind [3] : • specified in Schedule 1 to the Health Minister's Determination (Schedule), and • required, or in a class of goods required, to be included in the ARTG under the Therapeutic Goods Act 1989 (TG Act).

Within the Schedule, table item 5 specifies sunscreen preparations for dermal application that: • are marketed principally for use as sunscreen, and • have a sun protection factor (SPF) of 15 or more.

A supply of a product that would otherwise be GST-free under subsection 38-47(1) is not GST-free if the supplier and recipient have agreed that the supply, or supplies of a kind that include that supply, be treated as not GST-free. [4]

A supply of a product that contains sunscreen is GST-free, if that product is of a kind of sunscreen preparation for dermal application, with an SPF of 15 or more, that is required to be included in the ARTG under the TG Act and is marketed principally for use as sunscreen.

The phrase 'of a kind' is not defined in the GST Act, nor in the Health Minister's Determination. However, the phrase has been considered by the courts in the context of food classification under the GST Act. [5] In these cases, 'of a kind' has been interpreted as an operative phrase that adds further generality to the description of the item specified. It is necessary to determine whether the product is of the same genus, class, or category of items. [6]

Determining whether a product is 'of a kind' involves identifying the attributes of that kind of product that are required by the relevant provision, followed by an assessment of whether the product in question is a product of that kind. A product is 'of a kind' if it possesses the same distinguishing features as those that belong to a particular genus, class, or category of products. The degree of generality added by the phrase 'of a kind' may vary depending on the requirements in the relevant provision and the nature of the products involved.

The genus, class, or category of sunscreen products, the supply of which is GST-free, has been determined by the Health Minister as having 4 attributes: • is a sunscreen preparation for dermal application • has an SPF of 15 or more • is required to be included in the ARTG under the TG Act, and • is marketed principally for use as sunscreen.

The first 3 attributes raise simple binary questions of fact, objectively determined, to which the phrase 'of a kind' adds no further generality. For example, a product either has an SPF of 15 or more or it does not. This means that, if a product does not have one of these 3 attributes, it will not be in the genus, class or category of sunscreen products that are GST-free under this provision.

In contrast, there is a degree of generality added by the phrase 'of a kind' in relation to the fourth attribute – marketed principally for use as sunscreen. This means that, in determining whether a product is of a kind marketed principally for use as sunscreen, it is necessary to consider the kinds of products that are marketed principally for use as sunscreen (as explained further in paragraphs 22 to 55 of this Determination), and then determine if the product in question is a product of that kind.

To be GST-free, a sunscreen product must be of a kind that has all 4 attributes.

A sunscreen preparation for dermal application is a preparation containing sunscreen that is manufactured or compounded for application to the skin (including the lips) to reduce the incidence of skin damage caused by exposure to ultraviolet (UV) radiation. [7]

Sunscreen preparations may be in various forms including creams, lotions, gels, balms, oils or mousses, and be packaged in bottles, tubes, pump packs, sprays or sticks.

The SPF of a sunscreen product is determined by the test methods provided under the Australian/New Zealand Sunscreen Standard. [8] The SPF of the product must be stated on the product's packaging. Products with an SPF of 15 or more have the required attribute.

Sunscreens classified as therapeutic goods under the TG Act are regulated in Australia to ensure their safety, quality, and efficacy. Unless excluded, therapeutic sunscreens are required to be listed or registered in the ARTG under the TG Act. [9]

A sunscreen that is required to be included in the ARTG under the TG Act must show, on its labelling and packaging, its listing or registration number. Most sunscreen products required to be included in the ARTG under the TG Act are listed medicines and have an 'AUST L' identification number. Sunscreen products that are required to be registered have an 'AUST R' identification number. [10]

If a sunscreen product has an AUST L or AUST R identification number on its packaging, it is likely to be required to be included in the ARTG under the TG Act. If a sunscreen product does not have an AUST L or AUST R identification number, the product is not likely to be required to be included in the ARTG under the TG Act. The Appendix to this Determination contains a compliance approach on whether a sunscreen product is required, or in a class of goods required, to be included in the ARTG under the TG Act.

The marketing test is separate to the requirement that the sunscreen product is required, or in a class of goods required, to be included on the ARTG. A product may be required to be included in the ARTG but not be of a kind 'marketed principally' for use as sunscreen.

In determining whether a product is of a kind marketed principally for use as sunscreen, it is necessary to consider the kinds of products that are marketed principally for use as sunscreen. The marketed use of a product is to be determined objectively, having regard to what a reasonable observer would understand from the content of the marketing. [11]

The marketing test is a 'marketed principally' test. The marketing for use as sunscreen must be the principal marketed use – that is, the product must be of a kind marketed 'mainly, chiefly, predominantly or preponderantly' [12] for use as sunscreen. Given the law regulating sunscreens, sunscreen products generally have some marketing consistent with the product's use as sunscreen. However, it will not be sufficient that the product has some marketing for use as sunscreen. The product must be of a kind that is mainly, chiefly, predominantly or preponderantly marketed for use as sunscreen.

The marketing of a product involves the end-to-end process where products are put onto the market. This includes promotional and sales activities. [13] Marketing is not any activity performed by the seller but is the activities of the seller in communicating or conveying messages to the market for the promotion or sale of the product. The content of the marketing is what those activities objectively convey to the market. [14]

Marketing includes labelling (including the name of the product), packaging, directions for use, product placement, promotion and advertising. [15] Marketing does not include internal activities of the seller, nor is it determined by the subjective intention or motivation of the seller or the actual or intended use by the consumer. These things do not convey any message to the market. [16]

The marketing activities of all suppliers in a supply chain are relevant, including those of a manufacturer, importer, wholesaler and retailer. The marketing activities carried out by competitors in the market are also relevant to identifying the genus, class, or category of products marketed principally for use as sunscreen. [17] However, it is not appropriate to have regard to obscure or isolated incidences of marketing activities when determining whether a product is of a kind marketed principally for use as sunscreen.

In considering whether a product is of a kind marketed principally for use as sunscreen, a supplier does not need to carry out an exhaustive review of every supplier's individual marketing of a sunscreen product. Rather, suppliers need to consider how products of that kind are marketed generally by suppliers across the supply chain. The manufacturer's own marketing is relevant as this often reflects how other suppliers market those products.

A sunscreen product generally has a degree of consistency in its marketing across the supply chain. This is partly because the laws regulating advertising, including the therapeutic claims that can be made on and about sunscreen products [18] , and the product's labelling remain the same across the supply chain. A sunscreen product has the same GST treatment across the supply chain, irrespective of whether it is sold at the wholesale or retail level.

The statutory question is not whether the product itself is marketed principally for use as sunscreen. Instead, it is whether the product is 'of a kind' marketed principally for use as sunscreen. [19] However, while not determinative, the marketing of the product itself is relevant. [20] Where a product is marketed principally for use as sunscreen, this is a strong indicator that the product is 'of a kind' marketed principally for use as sunscreen.

Whether a sunscreen product is of a genus, class, or category of products marketed principally for use as sunscreen is a matter of 'overall impression'. [21] Where the marketing of a product includes more than one use, the use as sunscreen must be the main, chief, predominant or preponderant marketed use. Where there is no clear principal use discernible from the marketing, the product is not of a kind marketed principally for use as sunscreen.

Sunscreen is used to protect the skin from the harmful effects of the sun. Over-exposure to UV radiation causes sunburn, tanning, premature ageing of the skin and other skin damage that can ultimately result in skin cancer.

Statements in marketing that a sunscreen product can aid in the prevention of premature skin ageing, solar keratosis and sunspots and may reduce the risk of, or assist in preventing, some skin cancers are statements consistent with the use as sunscreen.

For sunscreen to provide effective protection from UV radiation, it is recommended that sunscreen is: • carefully and generously applied to skin before going outside • reapplied at regular intervals • reapplied after swimming, sweating, or towelling • used within the use-by date and stored in cool, dry conditions, and • used in combination with other sun protection measures for best protection (such as sun-protective clothing and avoiding prolonged sun exposure). [22]

Sunscreen products of a kind marketed for use as sunscreen typically include directions for use that are consistent with these recommendations. These are generally found on the product but may also be on its packaging or on informational material included in its packaging. [23]

Inclusion of directions for use to this effect is consistent with marketing for use as sunscreen. It would be uncharacteristic for products marketed principally for use as sunscreen not to have such directions for use.

In some cases, a sunscreen product is marketed solely for use as sunscreen. If so, the product is of a kind marketed principally for use as sunscreen.

Some sunscreen products are marketed as having a use other than sun protection. These products may still be of a kind marketed principally for use as sunscreen, where the use as sunscreen is the main, chief, predominant or preponderant marketed use. Whether a sunscreen product is of a kind marketed principally for use as sunscreen is a matter of overall impression involving an objective assessment of all the marketing information.

Sunscreen products are often marketed as having features relevant to their suitability and effectiveness for use in different environmental conditions or on different parts of the body or skin types. Whether these features merely complement the sunscreen function, make the product more suitable for sun protection use, or represent a separate use, are determined objectively having regard to the overall marketing of the product.

Table 1 of this Determination lists common terms and features used in the marketing of sunscreen products, and assists in determining whether a product is of a kind marketed principally for use as sunscreen: Table 1: Common terms and features used in marketing of sunscreen products [24] Terms and features that indicate a product is of a kind marketed for use as sunscreen Terms and features that are neutral indicators of whether a product is of a kind marketed for use as sunscreen Terms and features that may indicate a product is of a kind marketed for a use that is additional to its marketed use as sunscreen Terms and features that strongly indicate a product is not of a kind marketed principally for use as sunscreen broad-spectrum protection can aid in the prevention of premature skin ageing from UV damage can aid in the prevention of solar keratoses can aid in the prevention of sunspots directions for use that are consistent with those listed in paragraph 34 of this Determination may assist in preventing some skin cancers may reduce the risk of some skin cancers sunscreen sun protection ultraviolet A (UVA) and ultraviolet B (UVB) protection dry-touch easily absorbed flavour (in lip balms) fragrance lightweight non-greasy non-pilling non-whitening formulation reef friendly suitable for specified skin types, for example, dry skin, oily skin, acne-prone skin water and sweat resistant anti-ageing conditioning hydrating illuminating mattifying moisturising primer rejuvenating restoring revitalising tinting 2-in-1 3-in-1 beauty or blemish balm (BB) cream colour or complexion correcting (CC) cream correct the appearance of blemished skin dual action foundation full or medium coverage insect repellent make-up multi-use reverse the signs of ageing

The inclusion of all the following features in a product's marketing is a strong indicator that a product is of a kind marketed principally for use as sunscreen: • an SPF for high protection (30, 40 or 50) or very high protection (50+) • the directions for use include all the directions outlined in paragraph 34 of this Determination, and • therapeutic claims that the product can aid in the prevention of solar keratoses, sunspots or some skin cancers.

Such a product is generally GST-free unless the indicators of another use are strong, prescriptive and consistent enough to lead an objective observer to conclude, as a matter of overall impression, that the marketing of the other use is equal to or greater than the sunscreen use.

While no single factor is determinative, the labelling and packaging of a product is a primary and consistent source of marketing information. The labelling and packaging of a product is of particular importance to the overall impression that the product is of a kind marketed principally for use as sunscreen.

While a label does not determine the classification of a sunscreen product for the purposes of the GST Act, it must be taken into account. [25] Any impression gained from the labelling and packaging of a product needs to be weighed with impressions gained from other aspects of marketing, such as product placement, promotion and advertising.

Where a product is marketed as having a use additional to a sunscreen use, the name of the product can be an indication of which use is primary. For example, a 'moisturising sunscreen' is primarily identified as a sunscreen with a supplementary moisturising benefit. However, 'SPF moisturiser' or 'moisturiser with SPF' identifies primarily as a moisturiser with a supplementary sunscreen benefit.

Description of products as multi-use or multi-functional, either explicitly or through terms like '2-in-1' or '3-in-1', are indicative of products with multiple uses. These products may not have a main, chief, predominant or preponderant marketed use but rather equal uses. While these terms are a strong indicator that the product is not principally marketed for use as sunscreen, all the product's marketing needs to be considered. Strong, prescriptive and consistent marketing for use as a sunscreen may mean that the overall impression is that the product is of a kind marketed principally for use as sunscreen.

It is also relevant to consider the ordering and sizing of marketing content on the label and packaging to form an overall impression as to whether any particular use is given prominence. If the use as sunscreen appears more prominently in advertising materials than any other use, this is a factor that indicates the product may be of a kind marketed principally for use as sunscreen.

Product placement may include categorisation, location, pricing, special promotion and type of display of the product.

Placement with other products that are of a kind marketed principally for use as sunscreen may indicate that a product is of that kind. However, at the retail level, sunscreens are sold in a variety of different retail outlets that may have varied approaches to product placement, including categorisation, location and display of products. For instance, sunscreen products may be placed in different locations in physical stores or in different product categories on websites based on arbitrary factors or characteristics other than use.

Accordingly, product placement generally carries less weight than the primary and consistent source of marketing information, namely the label and packaging.

Any retail placement required by or agreed with a manufacturer is more persuasive than any product placement made by an individual retailer. It is relevant whether a manufacturer places a product in their sunscreen use category on their website, and whether they require retailers to place the products in the sunscreen use category in their retail stores and websites.

Marketing information and material published on websites or elsewhere (print, video, other media) are an important factor in forming an overall impression of the principally marketed use of a product.

Marketing material may emphasise different uses in different contexts. In this situation, it is necessary to form an overall impression as to the principally marketed use of the product based on the totality of the material, considering the relative prominence of any differing messages. Competing or conflicting messaging about multiple uses of a product may indicate that no main, chief, predominant or preponderant use is presented in the marketing of the product.

It is common for product marketing material to be produced by the manufacturer for use by retail outlets. This may be required by the manufacturer or agreed by the manufacturer and the retailer, and it is often part of a general marketing strategy. Marketing material produced by a manufacturer in this context carries more weight in assessing marketed use than individual retailer placement and promotion of products.

Whether a sunscreen product is of a kind marketed principally for use as sunscreen is a matter of overall impression. No one factor is determinative. However, as stated at paragraph 43 of this Determination, the labelling and packaging, including the name of the product, is of particular importance in the overall objective assessment of the marketing of a particular product.

Paragraphs 57 to 105 of this Determination provide examples illustrating how the marketed principally for use as sunscreen attribute applies in practice.

Manufacturer Co produces a face cream called Flawless Fluid. The product is labelled as having an SPF of 30.

The product packaging states it is a 'restorative face cream'. The packaging also states that the product has 'broad-spectrum UVA and UVB high level protection' and includes the words 'SPF 30' in large, bold font on the front of the product. The directions for use say it should be used each morning. The directions do not say it should be applied before sun exposure, reapplied regularly or that it is to be used with other sun protection measures.

Manufacturer Co does not have a separate sunscreen use category on its website and does not require retailers to place it in a specific category or location in their stores or on their websites.

Manufacturer Co's advertising material on its website states that the 'powerful moisturiser and antioxidants help reduce visible signs of ageing by smoothing out wrinkles, restoring the skin's firmness and hydration levels leaving the skin looking radiant and youthful'.

The overall impression is that Flawless Fluid is not a product of a kind marketed principally for use as sunscreen. While there is marketing for use as sunscreen, including stating it has high level sun protection, it also has significant marketing for its hydrating function and use in reversing existing visible signs of ageing (as opposed to preventing future premature ageing from sun damage). The directions for use do not include detailed sun protection instructions as would be expected for a product marketed principally for use as sunscreen. The overall impression is that the use as sunscreen is not the main, chief, predominant or preponderant use in the marketing of the product.

The supply of Flawless Fluid by Manufacturer Co is not GST-free under subsection 38-47(1).

Manufacturer Co produces a face cream called Smooth SPF. The product is labelled as having an SPF of 30.

The packaging states it is a 'hydrating broad-spectrum sunscreen' giving high protection from the sun. The directions state to apply before exposure to the sun, apply liberally, and reapply every 2 hours or after swimming, towelling or sweating, and to combine use with other sun protection measures. These directions for use are consistent with effective protection from UV radiation.

Manufacturer Co does not have a separate sunscreen use category on its website and does not require retailers to place it in a specific category in their stores or on their websites.

Manufacturer Co's advertising material on its website states the product is for use as a hydrating sunscreen, that it helps prevent skin damage and that it could prevent sunspots, solar keratosis and some skin cancers and premature ageing. Other than the description of the product as a hydrating sunscreen on its packaging and website description, no other statements are made about the hydrating or moisturising benefits associated with use of the product.

The high SPF of 30, the directions for use as a sunscreen and the therapeutic claims are strong indicators that Smooth SPF is of a kind marketed principally for use as sunscreen. The marketing material referring to the moisturising use is not strong, prescriptive and consistent enough to lead an objective observer to conclude, as a matter of overall impression, that the marketing of the other use is equal to or greater than the sunscreen use.

The overall impression of Smooth SPF is that it is a product of a kind marketed principally for use as sunscreen. Its use in preventing the premature ageing of the skin from sun damage is a feature of sunscreen use. The hydrating function is marketed as a feature that complements the sunscreen function (a hydrating sunscreen) as opposed to it being marketed as an equal or primary use.

The supply of Smooth SPF by Manufacturer Co is GST-free under subsection 38-47(1) if it is required to be included in the ARTG under the TG Act.

Manufacturer Co produces a cream for the face called Hydrating Rose CC Cream. CC stands for 'colour correcting'. The product is labelled as having an SPF of 50+.

The packaging states that the product gives 'medium coverage', 'will cover up the appearance of uneven skin pigmentation', and 'there is no need for a separate foundation'. The packaging also states that it contains multiple hydrating and moisturising ingredients that will enrich the skin. The directions for use say that it should be applied before going in the sun, reapplied every 2 hours and recommends the use of the 5 methods of sun protection.

Manufacturer Co does not have a separate sunscreen use category on its website and does not require retailers to place it in a specific category in their stores or on their websites. The product is placed in varying locations in different retail outlets and is often placed with other sunscreen products.

Manufacturer Co's marketing on its website describes the product in line with the product packaging explained in paragraph 71 of this Determination.

The very high SPF of 50+ and directions for use on how to apply as a sunscreen are features that indicate the product is marketed principally for use as a sunscreen. However, the following factors are strong, prescriptive and consistent enough to lead an objective observer to conclude, as a matter of overall impression, that the marketing of the other uses as a moisturiser and colour corrector is equal to or greater than the sunscreen use: • the name of the product • the references to changing the user appearance and removing the need to use foundation, and • its multiple hydrating and moisturising benefits.

The overall impression of Hydrating Rose CC Cream is that it is not a product of a kind marketed principally for use as sunscreen.

The supply of Hydrating Rose CC Cream by Manufacturer Co is not GST-free under subsection 38-47(1).

Manufacturer Co produces a lotion called Daily Wear Tinted Sunscreen. The product is labelled as having an SPF of 50+. The labelling describes the product as a very high-level broad-spectrum sunscreen with UVA and UVB protection.

The directions for use state that the product should be applied before exposure to the sun, applied generally to exposed areas, and reapplied every 2 hours or after swimming, towelling or sweating.

Manufacturer Co places the product in its separate sunscreen use category on its website. It does not require retailers to place it in a specific category in their stores or on their websites, but the product is often placed with other sunscreen products by retail suppliers.

The marketing on the website of Manufacturer Co advertises the product as a sunscreen with a subtle tint, offering very high UV protection. Other than the use of the word 'tint' in the product name and online description, there is no other statement or claim about tinting.

The overall impression of Daily Wear Tinted Sunscreen is that it is a product of a kind marketed principally for use as sunscreen. While it is described as containing a tint, there are no claims made about tinting and the effects or use that it would have. The use as sunscreen is significantly more prominent in the product's marketing than the use as a tint. The marketing of the tint feature is not, of itself, strong, prescriptive and consistent marketing material and the tint is ancillary to the main, chief, predominant or preponderant use as sunscreen.

The supply of Daily Wear Tinted Sunscreen by Manufacturer Co is GST-free under subsection 38-47(1) if it is required to be included in the ARTG under the TG Act.

Manufacturer Co produces a lip balm called High Protection Conditioning Lip Balm. The lip balm is labelled as having an SPF of 50+.

The packaging states that 'the water-resistant lip balm conditions dry and chapped lips and protects the lips from environmental factors including cold, wind and sun'. The product also states that it has very high UVA and UVB protection.

Manufacturer Co does not have a separate sunscreen use category on its website and does not require retailers to place it in a specific category in their stores or on their websites.

Manufacturer Co's marketing on its website is in line with the product packaging explained in paragraph 84 of this Determination.

The overall impression of the product is that it is not a product of a kind marketed principally for use as sunscreen. It is marketed as having several uses to protect against environmental factors that are equal to its marketing use as sunscreen.

The supply of High Protection Conditioning Lip Balm by Manufacturer Co is not GST-free under subsection 38-47(1).

Manufacturer Co produces a lotion called Bug and Sun Protect. The product is labelled as a 'Protective dual action SPF 50+ sunscreen and insect repellent'.

The label of the product includes the following marketing features: • 50+ displayed prominently, in bold font • UVA and UVB very high-level broad spectrum protection, written in small print • directions for use that are consistent with sunscreen, including to reapply every 2 hours • dual-purpose use for bug protection and sun protection, displayed in bold font, and • repels against flies and mosquitos for 2 hours.

Manufacturer Co places the product in its sunscreen category on its website and retailers place the product both with their sunscreen products and their insect repellent products.

The marketing on the website of the manufacturer discusses how the product protects against the sun and against bugs.

The overall impression of the Bug and Sun Protect product is that it is marketed equally for its protective use against the sun and against bugs. These features are equally prominent so that an objective observer would conclude as a matter of overall impression that the product is marketed for 2 equal and distinct uses, sun protection and bug protection.

Bug and Sun Protect from Example 6 of this Determination is supplied by Manufacturer Co to retailers.

The marketing of the product by Manufacturer Co, and by retailers generally, gives the overall impression that it is has 2 equally marketed uses and it is not of a kind marketed principally for use as sunscreen.

However, Retailer X designs their advertising to focus solely on the product's use as a sunscreen. It creates a 'Number 1 Manager Recommended Sunscreen' instore display and online pop-up. Their catalogue features an article which only highlights the use as sunscreen.

While Retailer X's advertising of the product is principally for use as a sunscreen, Bug and Sun Protect is not a product of a kind marketed principally for use as sunscreen. The advertising by the manufacturer, and by other retailers across the supply chain generally, is of greater weight in determining if the product is of a kind marketed principally for use as sunscreen.

Accordingly, Bug and Sun Protect is not of a kind marketed principally for use as sunscreen.

The supply of Bug and Sun Protect by Manufacturer Co and by retailers across the supply chain, including Retailer X, is not GST-free under subsection 38-47(1).

Manufacturer Co produces a lotion called Guardian Protective Daily Moisturiser SPF50+. The product is labelled as having an SPF of 50+. As well as specifying SPF protection in the name of the product, the labelling prominently describes the product as a 'hydrating broad-spectrum UVA and UVB sunscreen'.

The directions for use on the back of the tube are consistent with its use for effective UV protection including: • applying before going into the sun • reapplying every 2 hours or after swimming, sweating or towelling, and • use in conjunction with other sun protection measures, such as sun protective clothing.

Manufacturer Co places the product in its separate sunscreen use category on its website. It does not require retailers to place it in a specific location in their stores or a specific category on their websites. Retail suppliers often place the product with other sunscreen products.

The Manufacturer Co website markets the product for everyday use to protect the skin from UVA and UVB radiation and reduce the risk of some skin cancers, solar keratoses and sunspots. The marketing also states the product is kind to the skin, is non-greasy, lightweight, moisturising, and doesn't leave a white cast on the skin. The website claims the product is the answer to anti-ageing as it helps prevent premature skin ageing, such as fine lines, wrinkles and uneven skin tone.

The overall impression of the product is that it is a product of a kind marketed principally for use as sunscreen and that the moisturising and anti-ageing factors are ancillary to that use. The marketing of the product identifies a moisturising use by naming the product a moisturiser and referring to it as hydrating. However, the name and labelling highlight its very high SPF and its packaging includes directions for use as a sunscreen. Its marketing includes therapeutic claims that it may prevent against skin cancers, solar keratoses and sunspots. The anti-ageing claims in its marketing are linked to the benefits of sun protection in preventing skin damage, rather than marketing of the product for some other use.

The supply of Guardian Protective Daily Moisturiser SPF50+ by Manufacturer Co is GST-free under subsection 38-47(1) if it is required to be included in the ARTG under the TG Act.

This Determination applies both before and after its date of issue. However, the Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 75 to 76 of Taxation Ruling TR 2006/10 Public rulings ).

There may be practical difficulties for suppliers across the supply chain in determining whether a sunscreen product is 'required, or in a class of goods required, to be included in the ARTG under the TG Act' for the purposes of paragraph 5(b) of the Health Minister's Determination.

This may be because not every supplier of a sunscreen product will have direct knowledge of whether the product is 'required' to be included in the ARTG. All suppliers, however, will, at a minimum, know that a product has been included in the ARTG because such products have a AUST L or AUST R number. This number is printed on the product and packaging. [26]

We are therefore adopting a practical compliance approach on whether a sunscreen product is required, or in a class of good required, to be included in the ARTG under the TG Act. A product will still need to meet all the other attributes in paragraph 12 of this Determination to be GST-free.

If you have treated or treat a sunscreen product as being 'required, or in a class of goods required, to be included in the ARTG under the TG Act' in good faith because the product is included in the ARTG and has an AUST L or AUST R number, we will not have cause to devote compliance resources to reviewing this treatment.

This compliance approach applies to supplies made both before and after this Determination's issue date.

This compliance approach will not apply if: • there is evidence that you have knowledge that the product is not required, nor is it in a class required, to be included in the ARTG • there is evidence of fraud or evasion, or • you otherwise take inappropriate advantage of the compliance approach.