Private ruling: GST and food
Date of advice: 27 November 2017
Published: January 2018

Ruling: Q1: Are the listed salads GST-free? | A1: Yes, all of the salads listed are GST-free as long as the supplies are not made in circumstances indicating that consumption will take place on your premises. Facts: You are an entity selling food for dine in and take-away. You are expanding your product line to include the sale of the listed salads as separate menu items. The salads will be purchased ready made from a supplier in standard size tubs. The salads will be sold to customers in those same tubs, regardless of whether they dine in or take-away. Each shop has tables and chairs if customers choose to dine in. However, the salads are not served at the tables. Refrigeration is needed for transporting and storing the salads.


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 section 38-3. | A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-3(1)(a). | 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 section 38-4. | A New Tax System (Goods and Services Tax) Act 1999 Schedule 1 clause 1 table item 4.

Reasons for decision: Summary: A supply of food is GST-free in accordance with section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The term 'food' is defined as 'food for human consumption (whether or not requiring processing or treatment)'. The salads listed satisfy this definition of food. Subsection 38-3(1) of the GST Act excludes certain foods from GST-free status. Food that is not GST-free includes: ● food of a kind specified and ● food for consumption on the supplier's premises. Food of a kind specified includes food marketed as a prepared meal. This does not include soup. The classification of salads depends on whether they are considered a 'prepared meal'. The term 'prepared meal' is not defined in the GST Act and will bear its ordinary meaning. The Macquarie Dictionary (the dictionary) defines the term 'meal' as 'the food eaten or served for a repast'. This definition could be applied to a single food item or to a meal consisting of several food items. The dictionary defines 'prepare' in relation to food as 'to get ready for eating, as a meal, by due assembling, dressing or cooking'. Therefore, for food to be regarded as a 'prepared meal', it needs to be assembled, dressed, cooked, or partly cooked. Although, the salads are duly assembled, dressed and ready for consumption they are not marketed as prepared meals and as such are not food of a kind specified. Thus, the salads will only be a taxable supply if they are consumed on your premises. Generally, food consumed on the supplier's premises will be a taxable supply. The salads you sell may be consumed on the premises or they may be taken away for consumption. However, you do not make a distinction between dine in and take-away supplies. This is indicated by: ● the salads are sold in the same tubs to both dine in and take-away purchasers and ● you do not serve the salad in a way that would indicate that consumption would take place on the premises. That is, you do not serve the food at a table. As your business operations do not identify takeaway supplies from dine in supplies, all of the salads will remain GST-free. | Detailed Reasoning - 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 section 38-3. A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-3(1)(a). 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 section 38-4. A New Tax System (Goods and Services Tax) Act 1999 Schedule 1 clause 1 table item 4.

This notice must not be taken to imply anything about: | ● the binding nature of the private advice issued to the applicant | ● the correctness of other edited versions. | Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.