Private ruling: GST and food
Published: December 2013

Ruling: Q1: Is the supply of the frozen food GST free? | A1: No | Q2: Is the supply of the frozen food fillings to food manufacturers GST-free? | A2: Yes



Reasons for decision: Summary: A supply of a product is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (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 foods are for human consumption. The food fillings are supplied as ingredients for the preparation of food for human consumption. Therefore these foods satisfy the definition of food in subsection 38-4(1) of the GST Act However, subsection 38-3(1) of the GST Act specifies some foods that are excluded from being GST-free. The subsection states: A supply is not GST-free under section 38-2 if it is a supply of: (a) *food for consumption on the *premises from which it is supplied; or (b) hot food for consumption away from those premises; or (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a *beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2; or (e) food of a kind specified in regulations made for the purposes of this subsection. * denotes a defined term in the GST Act You supply frozen food to your customers. Therefore the relevant paragraph that may apply to your food supplies is paragraph 38-3(1)(c) of the GST Act. Foods that are of a kind specified in the third column of the table in clause 1 of Schedule 1 (Schedule 1) or food that is a combination of one or more foods with at least one of which is food of such a kind specified in Schedule 1 are excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. | Detailed Reasoning - Frozen food: The frozen food is made by wrapping the food fillings with a bread like product and then frozen for storage. Based on information provided, we consider that the frozen food may be food of a kind specified item 2 of Schedule 1 (item 2). Please note : Clause 2 of Schedule 1 of the GST Act provides that when considering foods listed in items 1 to 7 of Schedule 1, it does not matter whether the food is sold hot, cold or frozen or require cooking, heating, thawing or chilling prior to consumption. Therefore, food listed in item 2 could include frozen prepared foods. The foods listed in item 2 are sandwiches (using any type of bread or roll). The Macquarie Dictionary provides that 'bread' means " a food made of flour or meal, milk or water, etc., made into a dough or batter, with or without yeast or the like, and baked." A sandwich is a food that is made of bread or roll wrapping around food fillings. The public ruling, "Goods and Services Tax Industry Issues - Detailed Food List" lists examples of foods listed in item 2. The examples include filled baguettes, filled chapati wraps, filled focaccias, filled Italian bread and rolls (such as ciabatte loaves and rolls and focaccias), filled lebanese bread and rolls, filled lavash flatbread, filled pita wraps, filled naan bread. These foods have fillings wrapped in a bread product, similar to a sandwich food. They are food of a kind listed under item 2 and are therefore excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. The frozen food has food fillings wrapped in a bread like product. They are stored in a frozen state. The frozen food is similar to a sandwich food listed in item 2 as they contain food fillings wrapped in bread. The foods satisfy Clause 2 of Schedule 1 of the GST Act as they are stored in a frozen state. Therefore, the frozen food is excluded from being GST free by paragraph 38-3(1)(c) of the GST Act. | Detailed Reasoning - Food Fillings: The food filling is a mixture of meat and vegetables. The food filings is frozen and supplied in big containers. The food fillings are supplied to food manufacturers for further processing into foods for human consumption. The food fillings are not intended to be sold to the end consumer Based on the above information, the frozen food filings are not food of a kind listed in Schedule 1. They are food filings are sold to food manufacturers for further processing into food for human consumption. Therefore, the food fillings are not excluded from being GST-free by section 38-3 of the GST Act. The supply of the food filings is a supply of food ingredients under paragraph 38-4(1)(b) of the GST Act and is GST-free under section 38-2 of the GST Act

Relevant facts: · You are registered for the goods and services tax (GST). | · You manufacture foods and food filings for the frozen food market. | · The food contains a piece of bread wrapped around the cooked food fillings. | · The foods are stored in a frozen state. | · In addition you also supply food fillings to food manufacturers for further processing into foods for human consumption | · The food fillings are a mixture of meat and vegetables. | · The food filings are stored in a frozen state and are supplied in big container to food manufacturers. | · The food fillings are not ready for immediate consumption.