Private ruling: GST and food product
Published: January 2013

Ruling: Q1: Is your supply of the product a GST-free supply of food under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You are a company registered for the goods and services tax (GST) effective from 1 July 2000. You are to launch a new product. The product requires freezing for its storage recommended at minus 18 degrees Celsius and is to be reheated in a microwave prior to consumption. The instructions for cooking printed on the packaging of the product describe heating in a microwave oven only. The product is described on the packaging as a soup.

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 Paragraph 38-3(1)(c) | A New Tax System (Goods and Services Tax) Act 1999 Section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(a) | A New Tax System (Goods and Services Tax) Act 1999 Schedule 1

Reasons for decision: Summary: A supply of food is GST-free under section 38-2 of the 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 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) of the GST Act). The product is food for human consumption. However, section 38-3 of the GST Act specifies food that is not GST-free. 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Item 4 of Schedule 1 (Item 4) lists food marketed as a prepared meal but not including soup. Clause 3 of Schedule 1 of the GST Act provides that Item 4 in the table only applies to food that requires refrigeration or freezing for its storage. In your case, the product is supplied frozen and there are instructions for heating using a microwave oven provided on the packaging. However, wording on the packaging describes the product as a soup. Although the product is frozen, it is marketed as a soup, therefore it complies with Item 4 as soup and it is specifically excluded from Item 4. Thus, the product is not food of a kind specified at Item 4. It is not relevant that the soup is frozen as the GST Act does not exclude frozen soups from being GST-free. The supply of the product does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the supply of the product is a GST-free supply of food under section 38-2 of the GST Act.

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