Private ruling: GST and supply of a product
Published: June 2016

Ruling: Q1: ls your supply of the product GST-free?

Relevant facts and circumstances: You are registered for goods and services tax (GST). You supply the product, which is a food product that is manufactured in store from a machine that uses a simple heat and pressure system. The production process does not include any frying or roasting. The product is made from pellets, which is basically specific flour compressed. The product has a circular form with a diameter of approximately XXcm. A sample of the product shows that it has the appearance of a big (ready to eat) prawn cracker. The product is crisp in nature, the taste is not savoury. The product can be eaten as a crispy snack on its own or can be enjoyed with sweet or savoury toppings. The product can also be used in place of bread as a base for breakfast toppings such as eggs and ham. The product can be used as a replacement for bread by persons who are required to have gluten-free diets. Answer Yes, your supply of the product is GST-free. 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, whether or not it requires processing or treatment (paragraph 38-4(1)(a) of the GST Act). The product satisfies the definition of food because it is supplied as food for human consumption. However, paragraph 38-3(1)(c) of the GST Act provides that certain supplies of food are not GST-free if it is food of a kind specified in the third column of the table in Schedule 1 of 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. The product is neither a savoury snack (item 15) nor in any other similar way (item 18) of Schedule 1. The product is not a cracker (item 32 of Schedule 1). The product is not a combination of foods. Hence your supply of the product is a GST-free sale of food under section 38-2 of the GST Act.

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 Section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-5