Low volume and low value exemptions from annual charges
June 2008
Annual charges are not payable in respect of therapeutic goods (including medical devices) entered on the Australian Register of Therapeutic Goods (ARTG) that have been declared to have low volume and low value turnover.
Key points
- A declaration of low volume and low value turnover (LVLV) will be made where the annual charge payable in respect of an entry on the ARTG is, or has been estimated to be, greater than 6.8 per cent of the wholesale turnover of the goods.
- LVLV applications must be submitted for each financial year in which an annual charge is payable together with evidence of the turnover of the goods.
- Applications must be signed by an authorised officer. Penalties apply under the Crimes Act 1914 and the Criminal Code Act 1995 for making false or misleading statements and providing false or misleading information or documents.
- A non-refundable application fee must be paid at the time of submission of an LVLV application. A maximum application fee applies where exemption is sought for multiple therapeutic goods.
- The turnover of a therapeutic good or medical device in a financial year is the total value of that good or device as supplied in Australia in that financial year, exclusive of GST.
- Applicants will be notified in writing of a decision to grant an application for a declaration of low volume and low value.
- Sponsors may apply to the Administrative Appeals Tribunal for review of a decision by the Secretary to refuse an application, or an assumed decision to refuse an application.
- The TGA may require additional documentation or inspect records in relation to LVLV applications.
Procedures
To be eligible for an exemption from payment of annual charges a Sponsor must apply for a declaration that the turnover of a registered or listed therapeutic good, or kind of medical device, is low volume and low value, together with evidence of the turnover of that good or device.
Evidence that may be included with an application may include sales records, inventory records, management reports and financial statements. An application fee must accompany the application. A fee is payable for each therapeutic good or kind of medical device for which a declaration of low volume and low value is sought, up to the maximum fee prescribed in the Regulations (see the 'Summary of Fees and Charges'). <http://www.tga.gov.au/fees/fees08.htm>
To be assessed for an exemption, applications should be submitted prior to, or by, the due date for payment of an invoice for an annual charge.
Applications should be submitted by the due date of the invoice for the relevant annual charges.
Applications seeking a declaration of low volume, low value turnover for a new therapeutic good or kind of medical device approved during a financial year should be submitted by the due date of the invoice imposing annual charges for the financial year.
A low volume and low value declaration will be made where the Secretary is satisfied that the annual charge payable in respect of an entry on the ARTG is:
- greater than 6.8 per cent of the wholesale turnover of the good for the previous financial year or;
- if there was no turnover in the previous year, greater than 6.8 per cent of the value of the estimated wholesale turnover in the subsequent financial year.
Sponsors will be notified, usually within 30 days, whether a declaration has been granted.
Sponsors should note that annual charges are payable if an application has been declined, or if no declaration has been made within 40 days of receipt of the application.
Sponsors may apply to the Administrative Appeals Tribunal for review of a decision by the Secretary to refuse an application, or an assumed decision to refuse an application.
An annual charge may become payable in relation to a therapeutic good or medical device where the actual turnover is higher than previously in an application for a declaration.
- Sponsors must advise the TGA if the actual turnover for an entry on the ARTG for a therapeutic good or medical device is likely to result in the annual charge being less than 6.8 per cent of the turnover value.
The TGA conducts a sample review program to validate applications for therapeutic goods to be declared low volume and low value. This may require Sponsors to supply details of the actual turnover of goods in respect of a financial year. The TGA may also inspect Sponsor's records of sales.
Forms
- Application for declaration that turnover is of low volume and low value
<http://www.tga.gov.au/fees/forms/lowvolume.htm>
Assistance
TGA Revenue Manager: Facsimile 02 6232 8222 or by email to TGA.Accounts@tga.gov.au.
References
Therapeutic Goods (Charges) Act 1990
- Section 4 establishes annual charges.
Therapeutic Goods (Charges) Regulations 1990
- Sub-Regulation 4B(1) provides that charges are not payable where goods or devices are declared to be of low volume and low value.
- Regulation 4C sets out the matters that may be taken into account in considering an application.
- Regulation 4E sets out the fee for making an application and the maximum fee for multiple applications in a single year.
Regulation 5 makes an annual charge payable where the actual turnover exceeds an estimate included in an application for a declaration in prescribed circumstances.
Low volume and low value turnover thresholds 2008-09
| Item | Annual charge | Maximum sales turnover for exemption |
|---|---|---|
| Prescription medicine containing a biological active ingredient | $5,250 | $77,206 |
| Prescription medicine containing non-biological active ingredients | $3,140 | $46,176 |
| Registered over-the-counter and complementary medicines | $1,010 | $14,853 |
| Listed therapeutic products and complementary medicines | $710 | $10,441 |
| Registered medical devices | $2,170 | $31,912 |
| Registered therapeutic devices (ie IVDs) | $1,240 | $18,235 |
| Listed medical devices | $1,090 | $16,029 |
| Listed therapeutic devices (ie IVDs) | $620 | $9,118 |
| Included medical devices - class I | $60 | N/A* |
| Included medical devices class Im and Is | $500 | $7,353 |
| Included medical devices class IIa and IIb | $760 | $11,176 |
| Included medical devices class III and active implantable medical devices (AIMD) | $990 | $14,559 |
*The $60 annual charge for included medical devices - class I is less than the $120 low value low volume application fee. It is therefore in the sponsor's best interest to pay the annual charge.