ATO ID 2004/622: GST and bovine colostrum powder
Date of decision: 7 July 2004
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 bovine colostrum powder as food for human consumption?

Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies bovine colostrum powder as food for human consumption.

Facts
The entity is a food supplier. The entity supplies bovine colostrum powder. Bovine colostrum is derived from the first milking of dairy cows and freeze dried to form a powder. Bovine colostrum powder is high in protein and other nutrients. It has a variety of uses including food for human consumption, pharmaceuticals and in animal feed. The entity in this case is supplying bovine colostrum powder as food for human consumption. 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 the product satisfies the definition of food in section 38-4 of the GST Act and the supply is not excluded from being GST-free by section 38-3 of the GST Act. Food is defined in section 38-4 of the GST Act to include food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). Bovine colostrum powder that is supplied as food for human consumption satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act. However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free if it is food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Bovine colostrum powder is not food of a kind specified in Schedule 1. In addition, the supply of bovine colostrum powder does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies bovine colostrum powder as 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 paragraph 38-4(1)(a) Schedule 1 clause 1
Subject references: Goods and services tax GST free GST food Food for human consumption Ingredients for food