Sales Tax Bulletin - No. 21
STB 21
Containers used by pharmacists-
This document has been Withdrawn.View the Withdrawal notice for this document.
Date of Issue: 1 October 1997
Valid from 1 October 1997
| Produced by the Withholding & Indirect Taxes Program of the Australian Taxation Office. |
Replaces Sales Tax Bulletin No. 21 - Exemptions for labels and bottles used by pharmacists issued on 10 January 1995
About this bulletin
This bulletin explains when exemptions are available to pharmacists for bottles, labels and other containers, all referred to in this bulletin as containers, that are used to package drugs and medicines. It is a public ruling for the purposes of section 77 of the Sales Tax Assessment Act 1992 and may be relied upon by any person to whom it applies. It replaces any previous private or public rulings, if they are inconsistent with this bulletin, and is current as at 1 October 1997.
Warning: We regularly revise our publications to take into account changes in the law so if you are seeking to rely on anything contained in this bulletin, you should make sure that this edition is the latest.
If, after reading this bulletin, you need more information on how the sales tax law affects your business, contact the Tax Office on 13 28 66 for the cost of a local call.
In what circumstances are containers exempt?
Sales tax is a tax that is levied at the final point of wholesale sale. Any exemptions for goods used as containers are generally limited to those used by manufacturers and wholesalers. There are no exemptions for containers used by retailers to package or wrap up goods, bought by them from manufacturers and wholesalers, for sale to a customer.
When can I buy my containers free of sales tax?
Pharmacists who manufacture drugs or medicines (or sell them by wholesale), can claim exemption on containers used to package the manufactured drugs or medicines.
Manufacture for sales tax purposes is only involved where the activities result in a new commercial substance being formed. An example of this would be the mixing of various ingredients to make a drug or medicine, such as a cough mixture. Manufacture is also involved where ingredients are combined to make skin repair creams and other creams and ointments.
When can't I buy my containers free of sales tax?
You can't claim exemption from sales tax for containers used to pack medicines, tablets and other drugs into smaller containers, where you've bought those goods in that form from manufacturers and require the packaged goods for retail sale. This is because you are not involved in manufacture where you simply dispense tablets or medicines from larger containers into smaller ones (i.e. you've not brought a new product into existence).
You also can't claim exemption when you buy containers to use for packaging drugs and other medicines that you intend to sell by retail, which have been manufactured by, and purchased from, another person.
Can I register for sales tax?
Generally, only pharmacists who manufacture goods or sell goods by wholesale can register for sales tax. However, because goods marketed principally as drugs or medicines for use in preventing, curing or treating sickness or disease in humans are exempt from sales tax, you may choose not to register for sales tax purposes if you only manufacture such goods. Most pharmacists will not be registered for sales tax.
How do I claim exemption?
If you intend to use containers in circumstances where an exemption applies, you can buy them free of sales tax in one of two ways:
- 1. if you are an unregistered pharmacist, you can claim exemption by quoting an exemption declaration in the form shown on page 4; or
- 2. if you are registered for sales tax (as a pharmacist or for some other reason, such as wholesaling taxable goods), you can claim exemption by quoting your sales tax registration number in the following form:
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I hereby quote Sales Tax Registration Number Name of person authorised to quote Signature of person authorised to quote Date |
Do I have to quote every time I buy goods free of sales tax?
No. You can now give your suppliers a single quotation of your sales tax registration number to cover all your tax free purchases in a period where that period does not exceed one year (called a periodic quotation), in the following form:
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I hereby quote Sales Tax Registration Number ____________ in respect of all goods obtained by me during the period ____________ to ____________ inclusive, except goods in respect of which I notify you to the contrary at or before the time of the relevant assessable dealing with those goods. Name of person authorised to quote Signature of person authorised to quote Date Note - The maximum period that can be covered by a periodic quotation is one year. |
A periodic quotation of exemption declaration should be in the form shown on page 5.
For more information on buying goods free of sales tax, ask your local Tax Office for a copy of Sales Tax Bulletin Number 13 - Buying goods free of sales tax.
Do you need more information?
If you have any questions or need more information about how the sales tax laws apply to you, please contact your local Tax Office:
ATO references:
NO Nat. 2194.10.97