Private ruling: GST and food classification- honeycomb
Date of advice: 17 December 2015
Published: February 2016

Ruling: Q1: Is the supply of honeycomb (product) GST-free? | A1: Yes.

Relevant facts and circumstances: You are registered for the goods and services tax (GST). You are a producer of health products. You source the product from the Manufacturer. You state that the Manufacturer supplies the natural raw honey to you in large honeycomb rectangular frames. You cut the frames into smaller bits to fit them into plastic tubs. You supply the product to local retail shops, supermarkets, and gift shops. The packaging states that the product is a bee product. Your retail price is $X per tub. The information about the product is stated on your website as 100% honeycomb from the hive.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-2 | A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-3(1)(c) | A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-4(1)(a) | A New Tax System (Goods and Services Tax) Act 1999 Schedule 1

Reasons for decision: Summary: Under section 38-2 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a supply of food is GST-free. The meaning of the term food for GST purposes is defined in section 38-4 of the GST Act. This definition of food includes food for human consumption, whether or not it requires processing or treatment. Honey in its natural state (that is, still in the honeycomb) is food for human consumption. The Product is consumed in the state in which it is stored in the cell of the honeycomb, and therefore satisfies the definition of food under section 38-4 of the GST Act. However, under paragraph 38-3(1)(c) of the GST Act, certain supplies of food are not GST-free if it is food of a kind specified in the third column of the table in Schedule 1 of the GST Act (Schedule 1), or food that is a combination of one or more foods at least one of which is food of such a kind. The product is not food listed, or of a kind listed, at any of the items in Schedule 1. Additionally, they are not food that is a combination of one or more foods at least one of which is food of such a kind. Hence, the Product is not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Additionally, the Product is not excluded from being GST-free by virtue of any of the other paragraphs of subsection 38-3(1) of the GST Act. Therefore, the Product is GST-free under section 38-2 of the GST Act.