Private ruling: GST and the sale of pastry products
Published: October 2011

Ruling: Q1: Is the sale of your pastry products subject to goods and services tax (GST)? | A1: No.

Relevant facts and circumstances: You are registered for GST. You sell pastry products. The pastry products have no filling.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 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 A New Tax System (Goods and Services Tax) Act 1999 (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)). In your case you sell pastry products that have no filling. Unfilled pastry and tart casings satisfy the definition of food because they are food for human consumption. However, 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). The category of food from Schedule 1 that is of particular relevance to your pastry products is 'Bakery products'. Item 23 in Schedule 1 from the Bakery products category (Item 23) specifies that the supply of tarts and pastries is not GST-free. Therefore, the issue now is whether your unfilled pastry products are considered to be tarts or pastries. The words tart and pastry are not defined in the GST Act; therefore it is necessary to consider the ordinary meanings of those terms. The Macquarie Dictionary (3 rd edition) defines tart as a small and saucer-shaped shell of pastry, filled with cooked fruit or other sweetened preparation and having no top crust. Pastry is also defined as: · food made of paste or dough, as the crust of pies, etc. · articles of food of which such paste forms an essential part, as pies, tarts, etc. It is clear from the definition of the word tart that your pastry products are not tarts under this definition. Therefore, it is necessary to determine whether the reference to pastry in Item 23 should be interpreted to mean food made of paste or dough or whether the interpretation of the word pastry should be confined to articles of food of which such paste forms an essential part. An accepted principle of statutory interpretation provides that words take their meaning from the words with which they are associated. As such, the meaning of the word pastry can be derived from the context of the surrounding words used in Item 23. Item 23 lists tarts and pastries. As discussed, the definition of the word tart explains that a tart must consist of a pastry shell and a filling. Therefore, although the word pastry can mean food made of paste or dough such as a pie crust without a filling, it is considered that its close association to the word tart restricts the meaning of pastry to food of which such paste forms a part, but which also contains a filling. Hence, although your products are made of pastry, they do not contain any filling and therefore, they are not considered to be food of a kind that is described as a tart or a pastry in Item 23. In effect, the pastry products can be considered more as a necessary ingredient that is used in the making of a pastry (a food for the purposes of the GST Act). As such, Item 23 (or any other items listed in Schedule 1) does not exclude the sale of your pastry products from being GST-free. In addition, the supply of the pastry products does not fall within any of the other exclusions given in section 38-3 of the GST Act. Therefore, you are making a GST-free supply under section 38-2 of the GST Act, when you sell your pastry products.

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