Private ruling: Food classification
Published: August 2012

Ruling: Q1: Is the supply of custard GST free? Advice: Yes



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 (whether or not requiring processing or treatment)(paragraph 38-4(1)(a) of the GST Act). The Australian Taxation Office (ATO) has published a ruling "Goods and Service Tax Industry Issue - Food industry Partnership -What is food?" which outlines the meaning of food for GST purposes. Paragraph 1 of the ruling provides that a product is food if it is for human consumption (whether or not requiring further processing or treatment). In addition paragraph 6 of the ruling states: There is no requirement for the supplier to ascertain how the purchaser will use the product. The GST status of the product depends on whether it is a supply of food for human consumption as defined in the Act. Therefore, the custard satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act as it is promoted and supplied as food for human consumption. As indicated in paragraph 6 of the ruling it does not matter how the purchaser will use the product. 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). The GST status of food is outlined in the Goods and Services Tax Industry Issues -Detailed Food List (Food list). We enclose a copy for your reference. The relevant items in the Food Lists are: Item GST status Notes custard (flavoured, fruit, powder, ready-to-eat) GST-free Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. custard tart (supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) taxable Schedule 1, item 23 and clause 2 of the GST Act apply egg custard GST free Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. fruit custard GST free Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. Flavoured custard (ready-to-eat) is GST-free as it is food for human consumption that is not of a kind specified in Schedule 1 of the GST Act The custard is food for human consumption that is not of a kind specified in Schedule 1 of the GST Act and it is therefore not excluded from being GST-free by section 38-3 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. | Relevant facts: · You are registered for goods and services tax (GST). | · You carry on an enterprise of selling food. | · You are currently promoting your custard product. | · The custard is flavoured. | · The custard does not require cooking.