Private ruling: GST and a supply of frozen food products
Date of advice: 7 September 2018
Published: November 2018

Ruling: Q1: Is the supply of the frozen food products GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, the supply of the frozen food products is GST free under section 38-2 of the GST Act.

Relevant facts and circumstances: You are an Australian entity which is registered for GST. You want to import the frozen food products from overseas to sell in the various Supermarkets. The frozen food products are made from vegetables which is shape of grid like structure. Ingredients ● Vegetables ● Sunflower oil ● Rice flour; ● Salt; ● Stabiliser: Hydroxypropyl methyl, dextrose ● Spices The manufacturing process: The vegetables are washed, steam peeled and cut. Then the vegetables are steam cooked and mashed. The vegetable mash is mixed with above ingredients, and the obtained final mix is formed into grid like structure. The products are pre-fried in sunflower oil, then frozen and packed.

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 Subsection 38-3(1) | A New Tax System (Goods and Services Tax) Act 1999 Section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-4(1) Reason for decision | A supply of food is GST-free under section 38-2 of the GST Act if the products satisfy the definition of food in section 38-4 of the GST Act and the supply is not excluded by section 38-3 of the GST Act. | The term 'food' is defined in paragraph 38-4 (1) of the GST Act as including: (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; | Based on the information provided, the frozen food products satisfy the definition of food under section 38-4 of the GST Act. The frozen foods products are food for human consumption as they will be made from ingredients that are food for human consumption. We consider the frozen products to be food for the purposes of the GST Act. | Therefore the next thing to consider is whether the frozen food products fall within any of the exclusions in section 38-3 of the GST Act. Among, other things, paragraph 38-3(1) 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) or it is food consisting of a combination of one or more foods with at least one of which is food specified in Schedule 1. Of most relevance item to the frozen food products is Item 20 of Schedule 1 (Item 20). | Item 20 under the heading of 'Bakery products' includes ‘cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings' as foods that are not GST-free. | Clause 2 of Schedule 1 states that for the purposes of determining whether a particular food is covered by any of the items in the table relating to the category of prepared food, bakery products or biscuit goods, it does not matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption. | You advised us that the frozen food products consist a number of ingredients including vegetables, rice flour, sunflower oil, Salt, spices and a number of food additives such as stabiliser and dextrose. | Based on the facts provided, we consider, the frozen food products are not considered to be food of a kind listed in Item 20. | Accordingly, the supply of the frozen food products is not excluded from being GST-free by any provision contained in section 38-3 of the GST Act. Therefore, your supply of the frozen food products is a GST-free supply of food under section 38-2 of the GST Act.

Reasons for decision: Summary: A supply of food is GST-free under section 38-2 of the GST Act if the products satisfy the definition of food in section 38-4 of the GST Act and the supply is not excluded by section 38-3 of the GST Act. The term 'food' is defined in paragraph 38-4 (1) of the GST Act as including: (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; Based on the information provided, the frozen food products satisfy the definition of food under section 38-4 of the GST Act. The frozen foods products are food for human consumption as they will be made from ingredients that are food for human consumption. We consider the frozen products to be food for the purposes of the GST Act. Therefore the next thing to consider is whether the frozen food products fall within any of the exclusions in section 38-3 of the GST Act. Among, other things, paragraph 38-3(1) 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) or it is food consisting of a combination of one or more foods with at least one of which is food specified in Schedule 1. Of most relevance item to the frozen food products is Item 20 of Schedule 1 (Item 20). Item 20 under the heading of 'Bakery products' includes ‘cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings' as foods that are not GST-free. Clause 2 of Schedule 1 states that for the purposes of determining whether a particular food is covered by any of the items in the table relating to the category of prepared food, bakery products or biscuit goods, it does not matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption. You advised us that the frozen food products consist a number of ingredients including vegetables, rice flour, sunflower oil, Salt, spices and a number of food additives such as stabiliser and dextrose. Based on the facts provided, we consider, the frozen food products are not considered to be food of a kind listed in Item 20. Accordingly, the supply of the frozen food products is not excluded from being GST-free by any provision contained in section 38-3 of the GST Act. Therefore, your supply of the frozen food products is a GST-free supply of food under section 38-2 of the GST Act.