Private ruling: GST and supply of food
Date of advice: 4 October 2018
Published: November 2018

Ruling: Q1: Is the supply of the specified products GST-free? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You sell the specified products to retailers and consumers in Australia. You provided photos of the specified products including details of their ingredients, labelling and packaging. The products include: Seed products The products contain 100% specified seeds. The seeds in the products have not undertaken a process of salting, spicing, smoking, roasting or toasting or in any other similar way. The process is not a similar process to those indicated in item 16 in the table in clause 1 of Schedule 1 to the A New Tax System (Goods and Services Tax) Act 1999 . The product can be eaten on its own or added to other food. Breakfast cereals The products are advertised as a breakfast food. The nature of the products is similar to a breakfast cereal. The products exhibit a similar texture to other dry cereal products. The products do not require refrigeration for their storage. Food toppings The products consist of mixed seeds and intended as a topping for other food. The seeds in the products are not processed or treated by salting, spicing, smoking, roasting, toasting or any other similar way. Seed oil The product is cold pressed seed oil. The seed oil can be consumed directly or added to other food.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 (GST Act) section 38-2 | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) section 38-3 | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) paragraph 38-3(1)(c) | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) paragraph 38-4(1)(a)

Reasons for decision: Summary: The supply of the specified products is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) as the products meet the definition of food in section 38-4 of the GST and are not excluded from being GST-free by section 38-3 of the 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 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 among other things: (a) food for human consumption (whether or not requiring processing or treatment); ... (e) goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings); (f) fats and oils marketed for culinary purposes; However, section 38-3 of the GST Act specifies when a supply of food is not GST-free. This section states: (1) A supply is not GST-free under section 38-2 if it is a supply of: (a) *food for consumption on the *premises from which it is supplied; or (b) hot food for consumption away from those premises; or (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a *beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2; or (e) food of a kind specified in regulations made for the purposes of this subsection. (2) However, this section does not apply to a supply of *food of a kind specified in regulations made for the purposes of this subsection. (3) The items in the table in clause 1 of Schedule 1 or 2 are to be interpreted subject to the other clauses of Schedule 1 or 2, as the case requires. Seed products The seed products can be eaten on their own or added to other food. The products, satisfy the definition of food in paragraphs 38-4(1)(a) and 38-4(1)(e) of the GST Act. Paragraph 38-3(1)(c) of the GST Act provides that a food of a kind specified in the third column of the table in clause 1 of Schedule 1 to the GST Act (Schedule 1) will be taxable. Item 16 in Schedule 1 (item 16) is relevant for consideration. Item 16 specifies seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way. You advised that the seeds in the seed products have not undertaken a process of salting, spicing, smoking, roasting or toasting or in any other similar way. The process is not a similar process to those indicated in item 16. For the above reasons, the seed products are not food of a kind covered by item 16 or any other item specified in Schedule 1. In addition, the supply of the seed products does not fall within any of the other exclusions in section 38-3 of the GST Act. The supply of the seed products therefore is a GST-free supply under section 38-2 of the GST Act. Breakfast cereals The products are akin to dry breakfast cereals. The products do not require refrigeration for their storage. The product are food for human consumption and therefore meet the definition of food in paragraph 38-4(1)(a) of the GST Act. The products are not of a kind of food specified in Schedule 1 and therefore are not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Further, the supply of the products does not fall within any of the other exclusions in section 38-3 of the GST Act. Accordingly, the supply of the products is GST-free under section 38-2 of the GST Act. Food toppings The products are intended as a topping for other food. The products are food for human consumption and meet the definition of food in paragraph 38-4(1)(a) and paragraph 38-4(1)(e) of the GST Act. The products contain a variety of seeds. You advised that none of the seeds in the product are processed or treated by salting, spicing, smoking, roasting, toasting or any other similar process as the ones mentioned in item 16. The products are not of a kind of food specified in item 16 or any other item in Schedule 1. The products are therefore not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Further the supply of the products does not fall within any of the other exclusions in section 38-3 of the GST Act. Based on the above, the supply of the products is a GST-free supply under section 38-2 of the GST Act. Seed oil The product is cold pressed seed oil. The product can be consumed directly or added to other food. Therefore, the product is food for human consumption and falls within the meaning of food under paragraph 38-4(1)(f) of the GST Act. The product is not food of a kind specified in Schedule 1. The product is therefore not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Further the supply of the product does not fall within any of the other exclusions in section 38-3 of the GST Act. Based on the above, the supply of the product is a GST-free supply under section 38-2 of the GST Act.