Private ruling: Food classification
Published: February 2015

Ruling: Q1: Is the supply of your product GST-free? | A1: Yes

Relevant facts and circumstances: • You are registered for goods and services tax (GST). • You supply a product. • During a preparation process, the product is added to another product. • The product helps to preserve food.


Reasons for decision: Summary: Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you make a taxable supply if: • you make the supply for consideration • the supply is made in the course or furtherance of your enterprise • the supply is connected with Australia; and • you are is registered or required to be registered. However the supply is not taxable to the extent that it is GST-free or input taxed Your supplies satisfy all the criteria in section 9-5 of the GST Act. However, we need to consider whether your supplies are GST free under the provisions of the GST Act. | Detailed Reasoning - Food: A supply of a product 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), and • food ingredients for food for human consumption (paragraph 38-4(1)(b) of the GST Act). The product is an ingredient for food preparation. It helps to preserve food. Therefore it satisfy the meaning of food (paragraph 38-4(1)(b) of the GST Act). Under paragraph 38-3(1)(c) of the GST Act foods that are specified in the third column of the table in clause 1 of Schedule 1 (Schedule 1) are excluded from being GST-free. In this case, the ingredient is for food preparation and it is not food not listed in Schedule 1 of the GST Act and is therefore not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act . The supply of the food ingredient is GST free under section 38-2 of the GST Act.