Private ruling: GST and food
Published: August 2013

Ruling: Q2: Will the supply be a GST-free supply? Decision No.

Relevant facts and circumstances: · You are registered for goods and services tax (GST). · You are a food manufacturer/wholesaler, looking to supply a product for your customers who are food retailers selling to end consumers. · The product you will supply will be available in various flavours. · The product will be wrapped individually and then sold together in one packet. · The product will not require refrigeration. · You have provided emails showing images of the packaging of the product.


Reasons for decision: Summary: Section 9-5 of the GST Act provides that an entity makes a taxable supply when the requirements in that section are met. However, a supply is not a taxable supply to the extent that it is GST-free or input taxed. A supply of food is GST-free under section 38-2 of the GST Act if the product 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 section 38-4 of the GST Act to include food for human consumption (paragraph 38-4(1)(a) of the GST Act). The Tucker's Tiny Dippers are food for human consumption, and therefore, satisfy 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 specified in the table in clause 1 of Schedule 1 to 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 specified in Schedule 1. In your case, the product is packed in a single outer package which has two separately wrapped components inside. As the product contains more than one type of food, we have to determine whether the supply is a supply of 'food that is a combination of one or more foods at least one of which is a food of such a kind' specified in Schedule 1, or whether the product is possibly a mixed supply. | Detailed Reasoning - Combination/Mixed supplies: In this case, the product's packaging describes the product's components to be sold together in one combined packet. A supply combining individual foods that are taxable (that is, food of a kind listed in Schedule 1) and GST-free, but which are supplied in a single tray and are not separated by their individual packaging (for example a snack pack containing cheese and biscuits) is excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act, because it is a combination of food that contains a type of food specified in Schedule 1. We consider that your packaging is of this nature. This can be contrasted with a supply of individual food that is taxable (that is, food of a kind listed in Schedule 1) and GST-free, but which is packaged individually and then wrapped and sold together, for example, a hamper. This type of supply is not a combination of food that contains a food of a kind specified in Schedule 1 because, as each food is individually packaged and is generally capable of being sold in its own right, they are not 'combined'. Where this is the case, we don't consider they are combined but are a mixed supply, with the GST status of each item being assessed independently. As discussed above a mixed supply is a supply of individual foods that are taxable and GST-free, packaged individually and than wrapped and sold together, for example as a hamper. The Food Industry Issues Register, (the ATO view) at Issue 8 provides a definition of a hamper and within that definition the following is stated: ……..However, unlike a snack pack the different products in a hamper are not designed to be combined or blended for simultaneous consumption…… However, in your case the product's components are individually wrapped and are in a packet together. Based on the marketing on the packet and the product detail information, we can conclude that the products are only intended to be consumed together. The consumer is not expected to purchase the product and consume only one component. Also, given the quantities of each item, they would not generally be items that would be sold separately. Therefore, the product can be considered 'combined'. They are food that is combined and sold in a single packet and not simply a mixed supply of foods which would generally be sold individually, such as in the case of a hamper. Therefore, in this case, we consider your product is a combination of food. A supply combining an individual food that is taxable and a food that is GST-free, but which are supplied together in an additional outer packet, is excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act, because it is a combination of food that contains a type of food of a kind listed in Schedule 1. Therefore the supply of the product will be a taxable supply.

Question 1: Will the supply be a mixed supply for GST purposes?