Private ruling: GST and food products
Published: June 2013

Ruling: Q1: Will the supply of the food products be GST-free? | A1: Yes.

Relevant facts and circumstances: · You are registered for goods and services tax (GST). · Certain food products (Products) are to be manufactured and sold through your outlets. · The Products are made from a particular type of common ingredient. · Mixed into the ingredient are other food items. · The Products are cooked in an oven. Once cooked, they are removed from the oven and placed on display for sale. · While on display the Products cool down, however, they could still be warm when sold depending on the display time. · None of the Products contain a filling or have a sweet coating. · None of the Products will be consumed on the outlets' premises.

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

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 it is not excluded 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)) and ingredients for food for human consumption (paragraph 38-4(1)(d)). Your outlets are to manufacture and sell the Products. We consider these Products have the necessary ingredients and texture to be treated as a particular type of food product. As such, they satisfy the definition of food under 38-4 of the GST Act given they will be sold as food for human consumption. The Products will not be consumed on the premises from where they are purchased. We also do not consider the sale of the Products that are in the process of cooling down but may still be warm from the cooking process a supply of hot food. Consequently, the Products do not fall within any of the exclusions in section 38-3 of the GST Act apart from possibly paragraph 38-3(1)(c). 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 that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Schedule 1 includes a food item that may be of relevance when considering the GST treatment of the supply of the Products. Upon closer examination of this food item in Schedule 1 we conclude that the Products do not have the necessary characteristics to be treated as being the same type of food item. As such, Schedule 1 does not capture these Products and consequently their supply will be GST-free under section 38-2 of the GST Act.