Private ruling: GST and bird's nest
Published: May 2014

Ruling: Q1: Is the importation and supply of your Product subject to goods and services tax (GST)? | A1: No

Relevant facts and circumstances: • You are registered for GST. • You import and resell dry edible Product. • The Product is delicacy and is the main (and often only) ingredient in a specific dish. • It is a dry product (like rice) which is shelf stable. To cook, it needs to be soaked and boiled in water. Some restaurants cook the product only with water, some make it very fancy and add other delicacy ingredients of food. • The Product arrives in large vacuum sealed packages from overseas. The packages contain no other product other than 100% edible portion of the Product. • The product can be distributed in different methods: • You sell direct to restaurants Some of your restaurant customers may place an order of xxx grams of the Product and you select the Product from your stock and send out the Product in either a zip lock bag or a tupperware container depending on the customers' preference. • You sell to distributors You pack a fixed weight of the Product inside a rigid plastic tupperware style container and apply stickers showing branding and barcode and sell them to a distributor to grocery stores. The grocery stores then onsell the Product to customers who cook the Product. • You sell direct online direct to customers. The customer places an order on your website. You package the amount of the order and send the Product to them via courier. • The back of the retail box includes the following: • Net Weight: xx grams • Ingredients: 100% pure • Product of an overseas country. • Best Before: month/year • Imported & packaged in Australia by you, your office address • The bar code • Your website address. • Other than the recipe listed in your website, you provide another recipe for the product in a brochure to retail customers. • You provide a brochure on 'how to prepare the Product. • You also provide a brochure in conjunction with a catering services company to your restaurant customers to introduce more recipes at the restaurant level:

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | Section 38-1 | Section 38-2 | Section 38-3 | Section 38-4 | Schedule 1 to the GST Act | Summary | The supply of the Product is a supply of an ingredient for food for human consumption and is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Reasons for decision: Summary: A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in section 38-4 of the GST Act and is not excluded by section 38-3 of the GST act. The definition of food in section 38-4 of the GST Act includes ingredients for food for human consumption (paragraph 38-4(1)(b) of the GST Act. On the information you have provided the bird's nest is packaged and marketed as food and are sold to restaurants and individuals as an ingredient for food for human consumption. There is nothing in your website and brochures provided to your customers (retail and restaurants) promoting the product that is similar in nature to a medicine or a tonic. It is considered that: • You supply the product in Australia that are provided as food and market the product as ingredients for food. • Although the Product may have medicinal or therapeutic purposes: • the Product is not provided a part of herbal formula/prescription • the Product is not ingredients you market to use in medicinal decoctions • the Product is not supplied in tablet or capsule form • the overseas exporter does not specifically labels and markets the Product as medicinal goods • there is no instruction on the frequency and amount of the Product that can be consumed in a period of time. • you do not specifically label and market the Product as being medicinal goods in Australia. 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 specified in the table in clause 1 of Schedule 1 to the GST act (Schedule 1). Your Product is not a food of a kind specified in Schedule 1. In addition, your Product does not fall within any of the other exclusion in section 38-3 of the GST Act. Therefore, you make a GST-free supply under section 38-2 of the GST act when you supply the Product. Additionally the importation of the Product is a non-taxable importation