ATO ID 2002/299: GST and semi-dried, soft biltong
Date of decision: 13 November 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 biltong in its semi-dried, soft form?

Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies biltong in its semi-dried, soft form.

Facts
The entity is a food supplier. The entity supplies biltong in its semi-dried, soft form. Biltong is a dried, flavoured meat product that requires no refrigeration. It is made from uncooked lean meat that is dried in the open air to varying degrees. Traditional biltong is dry and hard. It is sold in strips, pieces and slices. It is a source of high protein that is eaten on its own (often by bushwalkers) but can also be used in salads, sandwiches, as an ingredient for savoury baked goods, quiches and omelettes or reconstituted for use in stews and soups. However, in this case, the entity is supplying biltong that is semi-dried and soft. This biltong is marinated and dried to a point where it is still moist. It is often packaged with an oxygen absorber in sealed plastic wrapping in order to extend the period it can be kept. The semi-dried, soft biltong is used in the same manner as other cooked, pickled, corned or smoked smallgoods and like most smallgoods, is also sold from delicatessens by the kilogram. 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. The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). Semi-dried, soft biltong is food for human consumption and therefore satisfies the definition of food in section 38-4 of the GST Act. However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if it is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Semi-dried, soft biltong is not food of a kind listed in Schedule 1. As such, the semi-dried, soft biltong is not excluded from being a GST-free supply of food under paragraph 38-3(1)(c) of the GST Act. In addition, as the supply does not fall within any of the other exclusions in section 38-3 of the GST Act, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies the semi-dried, soft biltong.

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
Related ATO interpretative decisions: ATO ID 2002/298
Subject references: Goods & services tax GST free GST food Food for human consumption