Private ruling: GST and food product
Published: April 2014

Ruling: Q1: Is the importation of the food products a taxable importation? | A1: No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. • ABCD Pty Ltd (you) are registered for goods and service tax (GST). • You advised that you plan to import two products into Australia for sale and would like to know whether or not GST is applicable upon importation. • The products are the baked goods . • The products are described as a type of dried fruit cake and are a traditional way to preserve fruits for the cold winter months • The products contain X% dried fruit. Y% almonds and a small percentage of grain and cinnamon moulded into a cake shape and served as an accompaniment to a dairy product. • The products do not contain flour. • The products have a shelf life of approximately 8 months. • The products are traditionally served as an accompaniment to a dairy product. • You have provided the product specification for both products. • The products that are the subject of the PBR are not sold as hot food and are not for consumption on the suppliers' premises. • You advised that you would be wholesaling the products to supermarkets and to restaurants. • You are unsure of the correct GST treatment as the GST Food guide indicates that dried fruits are GST exempt, and at the same time you contend that it is not a baked cake attracting GST.

Relevant legislative provisions: All references are to the A New Tax System (Goods and Services Tax) Act 1999 : Section 13-5 | Section 38-2 | Section 38-3 | Section 38-4 | Paragraph 38-4(1)(d) | Paragraph 38-3(1)(d) | Schedule 2

Reasons for decision: Summary: The products subject to the PBR are a supply of food that is GST-free pursuant to Division 38. The importation of the products for home consumption is a non-taxable importation. | Detailed Reasoning - Detailed reasoning: Section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that a supply of food as defined in the Act is GST-free with certain exceptions. The meaning of food is provided by section 38-4 of the GST Act and the products in question are consider to be food for human consumption (whether or not requiring processing or treatment) as per paragraph 38-4(1)(a) of the GST Act. The exceptions, being food that is not GST-free, are set out in section 38-3 of the GST Act. In regards to these products, paragraph 38-3(1)(c) of the GST Act needs to be considered as it provides that food of a kind specified in the third column of the table in clause 1 of Schedule 1 to the GST Act (Schedule 1) is not GST-free. The phrase 'of a kind' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that term. The Macquarie Dictionary (1997) does not define the entire phrase 'of a kind'. However, it defines the word 'kind' as: A class or group of individuals of the same nature or character, especially a natural group of animals or plants. 2. Nature or character as determining likeness or difference between things: things differing in degree rather than in kind. 3. A person or thing as being of a particular character or class. Accordingly, something will be 'of a kind' if it is of the same nature or character (possessing the same distinguishing qualities) as the thing or group in question. Your products are called xxxxxt Cake with xxxxxx and yyyyyy Cake with yyyyyy and consist of dried fruit and nuts moulded into round cake like shapes of various weights. The term 'cake' is not defined in the GST Act so the ordinary meaning is applied for interpretation purposes. However, in the application of item 20 of Schedule 1 to the GST Act the other products specified (i.e. slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings) provide the context of what is meant by cake (or 'of a kind' of cake) for the purposes of this provision. The Macquarie Dictionary Online (Sixth Edition October 2013) defines cake as per below: | Detailed Reasoning - cake: 1. a sweet baked food in loaf or layer form, made with or without shortening, usually with flour, sugar, eggs, flavouring, and a liquid. 2. a flat, thin mass of bread, especially unleavened bread. 3. a shaped or moulded mass of other food. 4. a shaped or compressed mass: a cake of soap; a cake of tobacco Although the products in question are called cakes and as a moulded mass of fruit and nuts, they would meet one of the ordinary meanings of cake, they are not a kind of cake to which item 20 of Schedule 1 to the GST Act applies. That is, they are not a kind of cake that is similar in characteristics to a slice, cheesecake or pudding. Also, based on the description of the products provided they do not align with any other food products of a kind listed in the third column of the table in Schedule 1 to the GST Act. Accordingly, the products are not excluded from being GST-free under paragraph 38-3(1)(c) of the GST Act. Therefore, the supply of your products is GST-free under section 38-2 of the GST Act.