Private ruling: GST and food
Published: November 2011

Ruling: Q1: Is your supply of a particular product (Product) subject to goods and services tax (GST)? | A1: No. Your supply of the Product is GST-free as an ingredient for food for human consumption. Your importation of the Product is also non-taxable as a consequence.

Relevant facts and circumstances: You are registered for GST. You import and then supply the Product. The manufacturer does not stipulate how the Product is to be used. You have provided a declaration from the manufacturer that the Product is prepared and intended for human consumption. The Product once imported is repackaged then marketed and sold by you as a food that can be eaten direct or added to other foods. The Product is not sold as a beverage or specifically marketed as an ingredient for a beverage albeit that it can be used to make beverages. You do not sell the Product in pill or capsule form. The ATO has determined the supply of similar products to be a GST-free supply of food.

Relevant legislative provisions: All references are to the A New Tax System (Goods and Services Tax) Act 1999: Section 13-10 | Section 38-2 | Section 38-3 | Section 38-4

Reasons for decision: Summary: Your supply of the Product is GST-free as an ingredient for food for human consumption. Your importation of the Product is also non-taxable as a consequence. | Detailed Reasoning - Detailed reasoning: The only provision in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) that may allow your supply of the Product to be GST-free is as a supply of food which is GST-free under section 38-2 of the GST Act. The food, however, must not come within any of the exclusions listed in section 38-3 of the GST Act. Subsection 38-4(1) of the GST Act defines food for the purposes of section 38-2 of the GST Act. Of the foods defined in this provision, the most relevant to your circumstances are paragraphs 38-4(1)(a) and 38-4(1)(b) which provide for food for human consumption (whether or not requiring processing or treatment) and ingredients for food for human consumption, respectively. Food is not defined in the GST Act so it therefore takes its ordinary meaning. The Macquarie Dictionary (5 th edition) provides that food is what is eaten, or taken into the body, for nourishment. The ATO has determined that the supply of similar products is GST-free as a supply of food. Also, the manufacturer's declaration states that the Product is prepared and intended for human consumption and you are marketing and selling the Product as a food. Given these circumstances, we consider that the Product does meet the requirements to be considered a food that is fit for human consumption. Given the way the Product is marketed and sold, we consider that on balance the Product would fall more into the category as an ingredient for food for human consumption. Furthermore, the Product does not come within any of the exclusions listed in either the main body of section 38-3 of the GST Act or within the third column of the table in clause 1 of Schedule 1 (a schedule listed in section 38-3 of the GST Act). Consequently its supply can be treated as being GST-free as an ingredient for food. Non taxable importation Please note that section 13-10 of the GST Act provides that an importation is a non-taxable importation if: · it is a non-taxable importation under Part 3-2 of the GST Act, or · it would have been a supply that was GST-free or input taxed if it had been a supply (for example, it would be a GST-free supply had the supply been made in Australia). In your case, your supply of the Product in Australia is GST-free and consequently, your importation is non-taxable under section 13-10 of the GST Act.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.