Private ruling: GST and supply of food
Date of advice: 21 May 2018
Published: May 2018

Ruling: Q1: Is the supply of your salads GST-free? | A1: Yes, the supply of your salads is GST-free.

Relevant facts and circumstances: You are registered for the goods and services tax (GST) You intend to sell your new salad product through supermarkets Your salads are contained in clear plastic malleable containers and contain salad ingredients such as lettuce, cheese etc individually sealed in plastic containers Your salads are not to be eaten on the premises where they are supplied Your salads are supplied with a plastic fork of low value.

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

Reasons for decision: Summary: A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (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 under 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 requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). Your salads are supplied as food. Therefore, as food for human consumption your salads satisfy paragraph 38-4(1)(a) of the GST Act. However, 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 that is specified in the third column of 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. You have advised us that your salad ingredients are separately packaged salad ingredients in a plastic food container. The only item in schedule 1 of relevance to your salads is item 4 (Item 4) which states ‘*food marketed as a prepared meal, but not including soup’ (Asterisked terms are defined under section 195-1 of the GST Act) Your salads require preparing in that the individually packaged components need to be opened and mixed to prepare a salad. Further, your salads are not marketed as a prepared meal. Consequently your salads are not a prepared meal and do not satisfy item 4 of Schedule 1. There are no other items in Schedule 1 which are relevant to your salads and as such your salads are not excluded from being GST-free under paragraph 38-3(1)(c) of the GST Act. | Detailed Reasoning - Packaging: The salad packaging is a clear plastic malleable container and is necessary to contain the salad. It satisfies section 38-6 of the GST Act as it is necessary for the supply of the food and is packaging of a kind in which food of that kind is normally supplied. You have stated that the plastic fork supplied in the salad is of very low value and consequently satisfies the de-minimis test under paragraph 7 of Goods and Services Tax Determination GSTD 2000/6. Accordingly, when you supply your salads you are making a GST-free supply under section 38-2 of the GST Act.