ATO ID 2001/268: GST and Savoury Flavoured Focaccias
Date of decision: 16 March 2000
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 sells savoury flavoured focaccias?

Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells savoury flavoured focaccias.

Facts
The entity is a food supplier. The entity supplies savoury flavoured focaccias. Some examples include pumpkin flavoured focaccias, olive topped focaccias, herb topped focaccias and tomato flavoured focaccias. The olive topped and herb topped focaccias do not have a substantial amount of topping and are not akin to pizza. The savoury flavoured focaccias supplied by the entity do not have a sweet filling or coating. The savoury flavoured focaccias are not sold for consumption on the premises from which they are supplied. The entity does not supply the savoury flavoured focaccias as hot food for consumption away from those premises. 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 provided that it does not come within any of the exclusions listed in section 38-3 of the GST Act. Food is defined in paragraph 38-4(1)(a) of the GST Act to include food for human consumption (whether or not requiring processing or treatment). Savoury flavoured focaccias are 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 food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). The category of food from Schedule 1 that is of particular relevance to this case is 'bakery products'. Item 27 from the category 'bakery products' in Schedule 1, provides that bread (including buns) with a sweet filling or coating is not GST-free. The issue therefore, is whether the flavoured focaccias are considered to be bread (including buns) with a sweet filling or coating. In this case, all of the focaccias supplied by the entity are savoury flavoured, or have savoury toppings. The focaccias supplied by the entity do not have sweet fillings or coatings. Therefore, the savoury flavoured focaccias are not covered by item 27 of Schedule 1 as they are not considered to be bread (including buns) with a sweet filling or coating. In addition, the supply of savoury flavoured focaccias 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 sells the savoury flavoured foccacias.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-2 section 38-3 paragraph 38-3(1)(c) paragraph 38-4(1)(a) Schedule 1 clause 1 Schedule 1 clause 1 table item 3 Schedule 1 clause 1 table item 27
Subject references: Goods & services tax GST free GST food Food for human consumption