Private ruling: GST and supply of food
Date of advice: 29 June 2016
Published: August 2016

Ruling: Q1: Is the supply of a powder made from specified ingredients (the powder) a GST-free supply pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. The supply of the powder is GST-free under section 38-2 of the GST Act because: • the powder is food for human consumption and satisfies the definition of food (paragraph 38-4(1)(a) of the GST Act) and • the supply of the powder does not fall within any exclusions in section 38-3 of the GST Act.

Relevant facts and circumstances: You are importing and selling powder made from specified ingredients into Australia. Powder is for human consumption. The powder has the same fineness as flour. It can be added to a range of recipes including pancakes, bread and pasta. It is added with other flours when used in cooking but cannot substitute wheat flour. It can also be added when making shakes or sprinkled on cereals. It is used for its nutritional content, that is, for added source of vitamins and minerals. You currently sell the powder to health food stores. You provided a flowchart of your manufacturer's production process for the powder. You provided pictures of the label. The label contains information about the nutritional content of the powder. The label also includes a recipe which includes the powder as an ingredient.


Reasons for decision: Summary: A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if it satisfies the definition of food in section 38-4 of the GST Act and it is not excluded by section 38-3 of the GST Act. The definition of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment) under paragraph 38-4(1)(a) of the GST Act. The powder is added to a range of recipes and used for its nutritional content. The powder is supplied as food in its own right and therefore 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). The powder is not a food of a kind specified in Schedule 1. In addition, the powder does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the supply of the powder is GST-free under section 38-2 of the GST Act.