BP Express stores has stopped charging Goods and Services Tax on sunscreen in its stores around Australia, and is offering a 10 per cent discount on the correct retail price for 155 days after an Australian Competition and Consumer Commission investigation, ACCC Chairman, Professor Allan Fels, said today.
BP Express inadvertently charged GST on sunscreen. After the ACCC raised its concerns, the corporate and franchise stores immediately agreed to rectify the problem and also offer a discount period to compensate consumers for the overcharge during the summer and autumn period. BP Express has put up in-store signs to advise customers of the overcharge.
The ACCC is satisfied with BP Express’ response and notes that the total overcharge from June to December 2000 was relatively small. BP Express has also agreed to make a donation to charity to ensure that it does not retain any financial benefit associated with its error.
"However the ACCC and Australian Taxation Office are concerned that other businesses are still charging GST on sunscreen products with sun protection factors of 15+ or higher as these products are exempt from GST*.
"Businesses which sell sunscreen preparations for dermal application that are marked principally for use as sunscreen and with a sun protection factor of 15+ or more should recognise that GST is not chargeable. The ACCC would expect any such businesses that may be charging GST on such products to stop and take steps to provide customers with appropriate refunds.
"If businesses are in doubt about the tax classification of products, particularly therapeutic goods, they should immediately contact the ATO to have these classification issues resolved. Businesses can obtain ATO advice by telephoning 13 24 78".
*See Department for Health and Aged Care determination, GST-free Supply (Health Goods) Determination 2000, dated 22 June 2000, Schedule 1.