ATO ID 2002/130: GST and glucose powder
Date of decision: 30 October 2001
Business line: Indirect Tax

Issue
Is the entity, a food supplier, making a GST-free supply under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies glucose powder?

Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies glucose powder.

Facts
The entity is a food supplier. The entity is supplying glucose powder. The glucose powder is composed of dextrose monohydrate. Glucose powder is added to water, juice, cereals or fruit for consumption. It is also used as a sweetening agent to enhance taste and flavour. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in subsection 38-4(1) of the GST Act and it is not excluded by section 38-3 of the GST Act. Food is defined in section 38-4 of the GST Act to include goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings)(paragraph 38-4(1)(e) of the GST Act). The glucose powder is added to water, juice, cereals or fruit for consumption. It is also used as a sweetening agent to enhance taste and flavour. Therefore, it is considered that the glucose powder satisfies the definition of food in paragraph 38-4(1)(e) of the GST Act as goods to be mixed with or added to food for human consumption. However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free, if it is a food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1), or food that is a combination of one or more foods, at least one of which specified in Schedule 1. Glucose powder is not food of a kind specified in Schedule 1, nor is it food that is a combination of one or more foods, at least one of which is of a kind specified in Schedule 1. Therefore, glucose powder is not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Furthermore, none of the other exclusions in section 38-3 of the GST Act exclude the supply of glucose powder from being GST-free under section 38-2 of the GST Act. Therefore, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies dextrose monohydrate as a powdery product to be mixed with or added to food for human consumption.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-2 section 38-3 paragraph 38-3(1)(c) section 38-4 subsection 38-4(1) paragraph 38-4(1)(e) Schedule 1 clause 1
Subject references: Goods & services tax GST free GST food Food for human consumption Ingredients for food