Private ruling: GST and food products
Published: December 2013

Ruling: Q1: Is the supply of the food GST free? | A1: Yes



Reasons for decision: Summary: Food is defined in section 38-4 of the GST Act. Under section 38-2 of the GST Act a supply of food is GST-free. However, food that is described in section 38-3 of the GST Act is not GST-free. The term food is defined in section 38-4 of the GST Act and includes food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The food products satisfy the definition of food in section 38-4 because they are food for human consumption. The food products are promoted as side dishes to accompany a meal. However, subsection 38-3(1) of the GST Act specifies some foods that are excluded from being GST-free. The subsection states: A supply is not GST-free under section 38-2 if it is a supply of: (a) *food for consumption on the *premises from which it is supplied; or (b) hot food for consumption away from those premises; or (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a *beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2; or (e) food of a kind specified in regulations made for the purposes of this subsection. * denotes a defined term in the GST Act The food products contain cooked food mixed with vegetables and are promoted as side dishes to accompany meals. The food products are ready to be consumed but are not supplied for consumption on your premises. The food products are shelf stable and do not require refrigeration for storage. They are not supplied as hot foods. Therefore, the paragraph that may apply to the food products is paragraph 38-3(1)(c) of the GST Act. Paragraph 38-3(1)(c) of the GST Act provides that foods that are of a kind specified in the third column of the table in clause 1 of Schedule 1 of the GST Act (Schedule 1) or food that is a combination of one or more foods with at least one of which is food of such a kind specified in Schedule 1 are not GST-free foods. Items 1 to 7 in Schedule 1 relate to prepared foods ready to be consumed and are intended to cover foods that directly compete against take-aways and restaurant food. Based on the information provided, we consider item 4 of Schedule 1 (Item 4) may be relevant to the food products. Item 4 is about food marketed as a prepared meal, but not including soup. Item 4- prepared meals The prepared meals that are listed under item 4 must satisfy the conditions outlined in both clauses 2 and 3 of Schedule 1 of the GST Act. Clause 2 of Schedule 1 provides that, when considering food under items 1 to 7, it does not matter whether the food is supplied hot, cold or frozen or requires cooking, heating, thawing or chilling prior to consumption. Clause 3 of Schedule 1 provides that item 4 will only apply to foods that require refrigeration or freezing for its storage. Therefore, the food products are not considered to be prepared meals under item 4 as the food products are supplied shelf stable and do not require refrigeration for storage. The food products do not satisfy Clause 3 of Schedule 1. As the food products are not food of a kind listed in Schedule 1, they are not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Therefore the supply of the food products is GST-free under section 38-2 of the GST Act. Other issues Section 13-5 of the GST Act provides that the importation of goods into Australia is a taxable importation if they are entered for home consumption within the meaning of the Customs Act 1901. The exception to this rule is when the importation is a non-taxable importation. The meaning of "non-taxable importation" is outlined in section 13-10 of the GST Act and it states: An importation is a non-taxable importation if: (a) it is a non-taxable importation under Part 3-2; or (b) it would have been a supply that was *GST-free or *input taxed if it had been a supply. Therefore, an importation is a non-taxable importation if, had the importation been a supply, the supply would have been GST-free or input taxed. The Australian Taxation Office view on non-taxable importation under paragraph 13-10(b) of the GST Act is outlined in Goods and Service Tax Ruling GSTR 2003/15. Paragraphs 250 to 251 of GSTR 2003/15 state: 250. An importation of goods that would have been GST-free or input taxed, if it were a supply, is a non-taxable importation. For example, the supply of a wheelchair is GST-free, therefore, an importation of a wheelchair is a non-taxable importation. 251. In determining whether an importation, if it had been a supply, would have been GST-free or input taxed, the Commissioner considers that you need to hypothesise that the importation were a supply to the importer. If this hypothetical supply to the importer would have satisfied one of the exemptions in Chapter 3 of the Act, the importation is non-taxable. Therefore if a supply of goods is GST free or input taxed in Australia, the importation will be a non-taxable importation under paragraph 13-10(b) of the GST Act. As your supply of the food products is GST free, the importation of the goods will be a non-taxable importation under section 13-10 of the GST Act.

Relevant facts: · You are registered for the goods and services tax (GST | · You import the food products into Australia for home consumption. | · The food product is promoted as a side dish to accompany a meal | · The food product contains cooked food mixed with vegetables. | · The food products are not supplied for consumption on your premises. | · The food product is shelf stable and does not require refrigeration for storage.