Private ruling: GST and food products
Published: September 2014

Ruling: Q1: Is the supply of the food products subject to goods and services tax (GST)? | A1: No.

Relevant facts and circumstances: • You are a company registered for GST. • You carry on an enterprise of a supermarket retailer. • You intend to sell 2 new food products (the food products) in your supermarkets. • The food products are manufactured in Australia. • The food products are made from a combination of ingredients and a little natural dark chocolate that have been crushed, blended and bottled. The product has no added oil, salt, gluten or dairy. • You advise that the products are marketed predominately as spreads and their predominate use is that of spreads, notwithstanding that the labelling also suggests that it can be used as a "mix with smoothies…or mixed with yoghurt ". • The products will be sold by you from the spreads section of the supermarket alongside other spreads such as Vegemite, jams. peanut butter and Nutella.

Relevant legislative provisions: All references are to the A New Tax System (Goods and Services Tax) Act 1999 : Section 38-2 | Section 38-3 | Section 38-4 | Schedule 1 | Schedule 2 | Summary | The supply of the food products are considered to be GST-free under paragraph | 38-4(1)(e) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) | Detailed reasoning | Section 38-2 of the GST Act states that a supply of food is GST-free . The term 'food' is defined in section 38-4 of the GST Act | Some foods are not GST-free in accordance with section 38-3 and these include food or a combination of food specified in clause 1 of Schedule 1 of the GST Act and beverages other than those specified in clause 1 of Schedule 2 of the GST Act. | Based on the above, the food products are GST-free, because the products are goods to be mixed with or added to food for human consumption as per paragraph 38-4(1)(e) of the GST Act and the products are not excluded by any of the exceptions in section 38-3 of the GST Act.