Private ruling: GST classification of the frozen buns
Date of advice: 21 March 2022
Published: May 2022

Ruling: A1: No. The supply of the Product is not GST-free under section 38-2 of the GST Act. The supply of the Product is a taxable supply under section 9-5 of the GST Act.

Relevant facts and circumstances: You import and supply the Product in Australia. The Product is made overseas. The Product has a sweet filling. The Product is sold frozen. The Product comes with different fillings. The ingredients in the filling are sugar and either seeds or vegetables depending on the flavour.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | 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 section 38-4. | A New Tax System (Goods and Services Tax) Act 1999 Schedule 1 clause 1 table item 27

Reasons for decision: Summary: The Product is food of a kind specified in item 27 in the table in clause 1 of Schedule 1 to the GST Act (item 27) and is excluded from being a GST-free supply by paragraph 38-3(1)(c) of the GST Act. Hence, the supply of the Product is not GST free under section 38-2 of the GST Act. The supply of the Product is a taxable supply under section 9-5 of the GST Act and subject to GST. | Detailed Reasoning - Detailed reasoning: A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in section 38-4 of the GST Act and it is not excluded by section 38-3 of the GST Act. 'Food' is defined in paragraph 38-4(1)(a) of the GST Act to include 'food for human consumption (whether or not requiring processing or treatment) '. The Product is 'food for human consumption' and satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act. However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free if it is food 'of a kind' that is specified in clause 1 of Schedule 1 to the GST Act ('Schedule 1'). The item listed in Schedule 1 that is of relevance in this case is item 27. Item 27 lists 'bread (including buns) with a sweet filling or coating'. Based on the information provided, the filling in the Product is a sweet mixture sugar and either seeds or vegetables depending on the flavour. As the Product has a sweet filling, the Product is food of a kind specified in Item 27 and is excluded from being a GST-free supply by paragraph 38-3(1)(c) of the GST Act. Therefore, the supply of the Product is not GST free under section 38-2 of the GST Act. The supply of the Product is a taxable supply as all the requirements of section 9-5 of the GST Act are satisfied as follows: • you supply the Product for consideration • the supply is made in the course or furtherance of an enterprise that you carry on • you supply the Product in Australia • you are registered for GST, and • the supply of the Product is neither GST-free nor input taxed. The following items are included in Detailed food list, which is a public ruling for the purposes of the Taxation Administration Act 1953 : | Detailed Reasoning - GST Status: buns with a sweet filling or coating (other than a glaze, supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) taxable buns with a sweet filling or coating (other than a glaze, supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) oriental bun - with sweet filling (supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) taxable Schedule 1, item 27 and clause 2 of the GST Act apply to an oriental bun with a sweet filling (refer to ATO ID 2004/709).

Issue: Is the supply of the Frozen Buns ('the Product') GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?