Private ruling: GST and food
Published: January 2012

Ruling: Q1: Will goods and services tax (GST) apply to your sale of the food product (Product)? | A1: No.

Relevant facts and circumstances: You are registered for GST. You are to import and then supply the Product to third parties. The Product is fit for human consumption. The Product meets the required standards set by the Food Standards Australia New Zealand (FSANZ). The Product will not be marketed as confectionery or as an ingredient for confectionery.

Relevant legislative provisions: All references are to the A New Tax System (Goods and Services Tax) Act 1999 : Section 13-10 | Section 38-2 | Section 38-3 | Section 38-4.

Reasons for decision: Summary: The only provision in the GST Act that may allow your supply of the Product to be GST-free is as a supply of food which is GST-free under section 38-2 of the GST Act. The food, however, must not come within any of the exclusions listed in section 38-3 of the GST Act. Subsection 38-4(1) of the GST Act defines food for the purposes of section 38-2 of the GST Act. Of the foods defined in this provision, the most relevant to your circumstances is paragraph 38-4(1)(a) which provides for food for human consumption. In your case, the Product is fit for human consumption as it meet the standards set by FSANZ and will be sold as food for human consumption. Hence, the Product is a food, the supply of which can be treated as being GST-free, provided it is not exempted under section 38-3 of the GST Act. Exempted food items 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. Schedule 1 includes the following food items that may be of relevance when considering the GST treatment of your supply: § confectionery, food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery (Item 8 of Schedule 1), and § savoury snacks in particular, food similar to that covered by Item 15 or 16 of Schedule 1, whether or not it consists wholly or partly of any vegetable, herb, fruit, meat, seafood or dairy product or extract and whether or not it is artificially flavoured (Item 18 of Schedule 1). Note that Item 15 and 16 of Schedule 1 includes products such as potato and corn crisps, pork crackling and seeds or nuts that have been processed by salting, smoking, roasting or similar. Confectionery In this case, we consider that the Product does not come under Item 8 of Schedule 1 as it will not be imported, marketed or displayed as an item of confectionery or as an ingredient for confectionery. Savoury snacks Although the Product has the appearance of a snack, it does not have the same characteristics as savoury snacks such as crisps or processed seeds or nuts. Given this, the Product does not meet the requirements to be considered under Item 18 of Schedule 1. Given these circumstances, the Product is not be exempted from being a food for human consumption under 38-3 of the GST Act and consequently, it is a food as defined by subsection 38-4(1) of the GST Act. Hence its supply will be GST-free. Non taxable importation Please note that section 13-10 of the GST Act provides that an importation is a non-taxable importation if: § it is a non-taxable importation under Part 3-2 of the GST Act, or § it would have been a supply that was GST-free or input taxed if it had been a supply (for example, it would be a GST-free supply had the supply been made in Australia). In your case, your supply of the Product in Australia will be GST-free and consequently, your importation will be non-taxable under section 13-10 of the GST Act.

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