If the price of your favourite skin care product goes up, don’t blame the ATO.
That’s the message the Australian Taxation Office after recent reports suggested the ATO was “cracking down” on manufacturers of skincare and sunscreen products in relation to GST and indicating the price of these products would increase because of ATO actions.
“These claims are incorrect,” the ATO said in a statement.
It said GST did not apply to products marketed principally as sunscreen and never had.
“The Australian Taxation Office (ATO) has not changed its view on the GST treatment of sunscreen.”
The statement said the ATO had improved its guidance to provide clarity on how the existing law applied and made it easier for suppliers to classify their products correctly.
“Modern products are being developed and marketed as having other benefits or uses, such as make-up or tint, or correcting the appearance of blemished skin.
“To be GST-free, a sunscreen product must be ‘marketed principally for use as sunscreen’.
“If a product is not marketed principally for use as a sunscreen it is, and always has been, subject to GST,” it said.
