Private ruling: GST and food
Published: February 2013

Ruling: Q1: Is your supply of your food products (Products) taxable? | A1: Yes.

Relevant facts and circumstances: · You are registered for goods and services tax (GST). · You supply two products. · The Products are labelled as ingredients to be added to, or to make, beverages.

Relevant legislative provisions: All references are to the A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | 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 Products 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 only relevant food meeting your circumstances is given in paragraph 38-4(1)(d) of the GST Act which lists ingredients for beverages for human consumption. The Products are ingredients to be added to, or to make, beverages. Hence, the Products can be considered food for human consumption under paragraph 38-4(1)(d) of the GST Act. Consequently, the supply of the Products would be GST-free provided they are not exempted under section 38-3 of the GST Act. | Detailed Reasoning - Exempted food items: Under paragraph 38-3(1)(d) of the GST Act, a supply of an ingredient for a beverage is not GST-free unless it is an ingredient of a kind that is specified in the table in clause 1 of Schedule 2 to the GST Act (Schedule 2). There are no items in Schedule 2 that would capture your Products. Consequently, the supply of the Products would not be GST-free supply under section 38-2 of the GST Act but taxable under section 9-5 of the GST Act.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.