Private ruling: Goods and services tax (GST) and drink products
Date of advice: 11 November 2016
Published: March 2017

Ruling: Q1: Is the supply of the products GST-free pursuant to 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 registered for GST. You have developed a new line of drink products, with a specified trademark name. These drink products include various flavours. The products are for quenching thirst and for nourishment. No medical or curative claims are made on the labelling or promotional material.

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 section 38-4

Reasons for decision: Summary: Your sale of the products is GST-free because they are beverages for human consumption covered by item 12 in the table in clause 1 of Schedule 2 to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Detailed Reasoning - Detailed Reasoning: 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 does not come within any of the exclusions listed in section 38-3 of the GST Act. Food is defined in section 38-4 of the GST Act to include '*beverages for human consumption' (paragraph 38-4(1)(c)). Your products are beverages for human consumption. Therefore, they satisfy the meaning of food in section 38-4 of the GST Act. However, paragraph 38-3(1)(d) of the GST Act provides that a beverage is not GST-free under section 38-2 of the GST Act unless it is a beverage of a kind specified in the third column of the table in clause 1 of Schedule 2 to the GST Act (Schedule 2). Item 12 of Schedule 2 (Item 12) is 'non-alcoholic non-carbonated *beverages, if they consist of at least 90% by volume of juices of fruits or vegetables'. Goods and Services Tax Determination GSTD 2002/2 (GSTD 2002/2) discusses what supplies of fruit and vegetable juices are GST-free. Paragraph 10 of GSTD 2002/2 provides that the labelling of a product will indicate whether it consists 90% or more of fruit or vegetable juices. Based on the information provided, the products are non-alcoholic and non-carbonated beverages and they consist of at least 90% by volume of juices of fruit. Hence, they are covered by item 12 and the exclusion at paragraph 38-4(3)(1)(d) of the GST Act does not apply. Furthermore the supply of the products does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the supply of the products is GST-free under section 38-2 of the GST Act.