Private ruling: GST-free supply of food products
Date of advice: 19 December 2017
Published: May 2018

Ruling: Q1: Is your supply of the listed products GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Product A GST-free Product B GST-free Product C GST-free Product D GST-free Product E GST-free Product F GST-free


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 Paragraph 38-3(1)(d). | 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)(b). | A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(c). | A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(d). | A New Tax System (Goods and Services Tax) Act 1999 Schedule 1, Clause 1, item 4.

Reasons for decision: Summary: The supply of the listed Plant-based milk products is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) because they are similar to beverages of a kind specified under item 4 in the table in clause 1 of Schedule 2 of the GST Act (item 4). Product F is an ingredient of food for human consumption which is not considered to be food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Therefore, the supply of this product is GST-free under section 38-2 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 to include beverages for human consumption (paragraph 38-4(1)(c) of the GST Act) and ingredients for beverages for human consumption (paragraph 38-4(1)(d) of the GST Act). Plant-based milk products are considered to be either beverage for human consumption or ingredient for a beverage for human consumption. However, under paragraph 38-3(1)(d) of the GST Act, a supply of a beverage or an ingredient for a beverage is not GST-free unless it is of a kind listed in the table in clause 1 of Schedule 2 to the GST Act (Schedule 2). The phrase 'of a kind' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that term. The Macquarie Dictionary (1997) does not define the entire phrase 'of a kind' however, it defines the word 'kind' to mean: 1. A class or group of individuals of the same nature or character, especially a natural group of animals or plants. 2. Nature or character as determining likeness or difference between things: things differing in degree rather than in kind. 3. A person or thing as being of a particular character or class: he is a strange kind of hero. 4 ... Accordingly, something will be 'of a kind' if it is of the same nature or character (possessing the same distinguishing qualities) as the thing or group in question. In addition, the case law Lansell House Pty Ltd & Anor v FC of T 2011 ATC 20-239 at [30] relevantly provides: The use of the words "of a kind" in s 38-3(1)(c) of the GST Act adds further generality to the description of the items described in Schedule 1: Air International Pty Ltd v Chief Executive Officer of Customs (2002) 121 FCR 149 per Hill J . Thus, a new product that does not possess all of the same characteristics of known crackers may nevertheless be within the relevant item… In coming to its decision, Lansell also considered, among other things, the product’s: ● use ● in store display ● marketing ● tax treatment in the country of manufacture, and ● appearance. As the plant-based milk is similar to rice and soy milks, we consider item 4 maybe applicable to Plant-based milk products. The explanation on beverages listed under item 4 is outlined in the Australian Taxation Office public ruling "Detailed Food List" (Food Lists). Beverages that are listed on the Food Lists under item 4 are: Item GST status Notes rice milk (unflavoured) GST-free Schedule 2, item 4 of the GST Act applies. soy milk (sweetened) GST-free Schedule 2, item 4 of the GST Act applies. because the soy milk is only sweetened not flavoured (refer to ATO ID 2001/366). soy milk (unflavoured) GST-free Schedule 2, item 4 of the GST Act applies. | Detailed Reasoning - Products A, B and C: The Plant-based milk products are marketed as a certified organic, lactose-free, healthy and nutritious alternative to cow’s milk. It covers the specific needs of vegetarian or vegan diets. The Plant-based milk products are prepared from plants similar to the soy milk (from soybean) or rice milk (from rice). Therefore, the unflavoured Plant-based milk products are similar to beverages of a kind specified under item 4. In addition, soy milk (sweetened) is listed on the Food Lists as GST-free. Sugar is added to the soy milk as a sweetener and is not considered to be flavouring. The Plant-based milk products with added sweetener are similar to the soy milk (sweetened) and are therefore considered to be unflavoured almond milk. Similarly, a mineral is not considered a flavouring. The Plant-based milk products with added mineral are therefore considered to be unflavoured almond milk. As the Plant-based milk products you supply is a beverage prepared from plants and is not flavoured, it is therefore similar to beverages of a kind specified in item 4. The supply of the Plant-based milk products is not excluded from being GST-free under section 38-3 of the GST Act. Therefore, the supply of the Almond milk is GST-free under section 38-2 of the GST Act. | Detailed Reasoning - Products D and E: The ingredients of these products are a combination of plant-based products. As these constituents are similar to plant-based milk products on the market, these beverages are similar to beverages of a kind specified in item 4. Hence, their supply is GST-free under section 38-2 of the GST Act. | Detailed Reasoning - Product F: The ingredients of this product include plant-based products and sweetener. It is marketed for use in cooking recipes. It can be used in various sweet and savoury recipes, as well as in tea or coffee. This product satisfies the definition of food under paragraph 38-4(1)(b) of the GST Act as an ingredient of food for human consumption. However, under paragraph 38-3(1)(c) of the GST Act, a supply of a supply of food is not GST-free if it is a supply of food of a kind specified in Schedule 1. This product is not considered to be food of a kind specified in Schedule 1 and does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the supply of this product is GST-free under section 38-2 of the GST Act. | Detailed Reasoning - Non-taxable importation: Section 13-10 of the GST Act provides that an importation is a non-taxable importation if: ● it is a non-taxable importation under Part 3-2 of the GST Act, or ● it would have been a supply that was GST-free or input taxed if it had been a supply (for example, it would be a GST-free supply had the supply been made in Australia). As discussed above, the supply of the above listed products in Australia is GST-free. Consequently, the importation is a non-taxable under section 13-10 of the GST Act.

Relevant facts: You sell various products including plant-based milk products. | These products are either sourced locally or overseas. | You have asked for the GST classification of a particular brand of plant-based milk products. You referred us to your website for further information about your manufacturer and each product. | The Plant-based milk products are marketed as a certified organic, lactose-free, healthy and nutritious alternative to cow’s milk. They cover the specific needs of vegetarian or vegan diets. | Plant-based milk product sugar-free | Shake well before opening. Keep refrigerated after opening and consume within a few days. Plant-based milks can be consumed at any time of the day, hot or cold, in coffee or tea, and can also be used in your recipes. | Organic plant-based milk sugar-free with added minerals | Organic plant-based milk with sweetener | Combination of plant-based milks | Organic dairy-free cooking product | ● Shake well before opening. Keep refrigerated after opening and consume within a few days.