Private ruling: Goods and services tax (GST) and food products
Date of advice: 3 July 2015
Published: July 2015

Ruling: Q1: Is GST payable on your sales of the food products? | A1: No. | Q2: Is GST payable on your importation of the food products? | A2: No.

Relevant facts and circumstances: You registered for GST. You will be importing a food wrap product. A customs broker will clear the goods through Australian Customs on your behalf. You will sell the product in Australia. The food products are made from various ingredients.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1) | A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 subsection 13-5(1) | A New Tax System (Goods and Services Tax) Act 1999 paragraph 13-10(b) | 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

Reasons for decision: Summary: The food products are GST-free food. | Detailed Reasoning - Detailed reasoning: GST is payable on taxable supplies. You make a taxable supply where you satisfy the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states: You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with Australia; and (d) you are *registered, or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (*Denotes a term defined in the GST Act) You meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because: • you will supply the food products for consideration • you will supply the food products in the course or furtherance of an enterprise that you carry on • these supplies will be connected with Australia, and • you are registered for GST. There are no provisions of the GST Act under which your sales of the food products will be input taxed. Therefore, what remains to be determined is whether your sales of the food products will be GST-free. A supply of food is GST-free in accordance with section 38-2 of the GST Act, if it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in subsection 38-3(1) of the GST Act. Paragraph 38-4(1)(b) of the GST Act provides that ingredients for food for human consumption are food for the purposes of the GST Act. Subsection 38-3(1) of the GST Act 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 (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. The food products are an ingredient for food for human consumption and are therefore food for the purposes of the GST Act. The exclusions at paragraphs 38-3(1)(a), 38-3(1)(b), 38-3(1)(d) and 38-3(1)(e) of the GST Act do not apply to your sale of the food products. Item 2 Item 2 in the table in clause 1 of Schedule 1 to the GST Act is sandwiches (using any type of bread or roll). Food products are not sandwiches or similar to sandwiches because they do not contain a filling at the time of supply. Item 4 Item 4 in the table in clause 1 of Schedule 1 to the GST Act is food marketed as a prepared meal, but not including soup. Food products are an ingredient for a meal, rather than a meal in their own right. Food products are not marketed as a prepared meal. Food products are not food of a kind listed at any other item in Schedule 1. Therefore, the exclusion at paragraph 38-3(1)(c) of the GST Act does not apply. As the food products are food for the purposes of the GST Act and none of the exclusions at subsection 38-3(1) of the GST Act apply, your sales of this product are GST-free under section 38-2 of the GST Act. Hence, GST is not payable on your sales of the food products. | Detailed Reasoning - Question 2: Subsection 7-1(1) of the GST Act states that GST is payable on taxable importations. Subsection 13-5(1) of the GST Act states: You make a taxable importation if: (a) goods are imported; and (b) you enter the goods for home consumption (within the meaning of the Customs Act 1901 ). However, the importation is not a taxable importation to the extent that it is a *non-taxable importation. You will import goods - the wrap product. Therefore, you meet the requirement of paragraph 13-5(1)(a) of the GST Act. You will enter the goods for home consumption (your customs broker will clear the goods through Australian Customs on your behalf). Therefore, you meet the requirement of paragraph 13-5(1)(b) of the GST Act. Paragraph 13-10(b) of the GST Act provides that an importation is a non-taxable importation if it would have been a GST-free supply if it had been a supply. The sale of the food products is GST-free. Therefore, the importation of this product is not subject to GST. You will need to quote the food exemption code (FOOD) in the import declaration so that GST is not imposed on the importation.