Private ruling: GST and food
Date of advice: 31 March 2017
Published: May 2017

Ruling: Q1: Is the supply of the Product GST-free? | A1: Yes.

Relevant facts and circumstances: You are registered for goods and services tax (GST). You sell various health foods including the Product which contains 100% raw wholefoods in a powder form. It is taken by teaspoon and is intended to be consumed just like any other food by eating it on its own or mixed with any other type of food. It provides energy and contains protein, carbohydrates, fats, fibre and sodium.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999: Subdivision 38-A | Section 38-2 | Section 38-3 | Section 38-4 | Schedule 1

Reasons for decision: Summary: 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 the supply is not excluded from being GST-free by section 38-3 of the GST Act. 'Food' is defined in subsection 38-4(1) of the GST Act to include: (a) food for human consumption (whether or not requiring processing or treatment); (b) ingredients for food for human consumption; (c) beverages for human consumption; (d) ingredients for beverages for human consumption; (e) goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings); … Section 38-3 of the GST Act lists food that is not GST-free. Paragraphs 38-3(1)(c) and 38-3(1)(d) of the GST Act provide: (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1, (Schedule 1) or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2 (Schedule 2); If a product is food, then the test in the law is to determine if the product has the characteristics to fall within an exclusion in section 38-3 of the GST Act and relevantly an item in Schedule 1 or Schedule 2. Food is defined in section 38-4 of the GST Act to include food for human consumption (paragraph 38-4(1)(a) of the GST Act). You have advised us of the ingredients of the Product which contains various vegetables, legumes, nuts and seeds. The Product is marketed and intended to be consumed as a food. It is considered that as the ingredients of this food are food in their own right, the essential character of the food combination satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act. However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if it is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). It is considered that none of the ingredients in the Product or the Product as a whole satisfies any of the items in Schedule 1. Therefore, the supply of the Product is a GST-free supply.