Private ruling: GST and food
Date of advice: 15 November 2017
Published: January 2018

Ruling: Q1: Is the supply of ‘salad to go’ or salads marketed as ‘to go’ a GST-free supply of food? | A1: Yes.

Relevant facts and circumstances: Your ruling is based on the following facts. ● You are registered for GST. ● You intend to provide a selection of salads which can include chicken and tuna combined with pasta and dressing. ● Your salads are prepared and packaged. ● The salads are sold in plastic containers (takeaway form) which are stored in each store's refrigerator. ● The label on the salad container shows one serve per pack. ● You do not provide tables within your stores so that food may be consumed on the premises. ● You are not marketing the salads as a complete meal.

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 Section 38-4 | A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(a)

Reasons for decision: Summary: Yes, the sale of your prepared salad products is GST-free. | Detailed Reasoning - Detailed reasoning: A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in section 38-3 of the GST Act. The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The salads are food for human consumption. Therefore, your prepared salads fall within the meaning of food in section 38-4 of the GST Act. Paragraph 38-3(1)(c) of the GST Act refers to a supply of food is not GST-free if it is food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Of specific relevance is item 4 of Schedule 1 (Item 4), which provides that food marketed as a prepared meal (but not including soup) is not GST-free. For, food to be regarded as a ‘prepared meal’ under item 4, the food needs to be assembled, dressed, cooked or partly cooked. Your salads fit the definition of a prepared meal, as they are prepared salads ready for consumption. However, in determining whether food is 'marketed' as a prepared meal the activities of the seller are relevant. Consideration is given to the following: ● the name of the goods ● the price of the goods ● the labelling on any containers for the goods ● literature or instructions packed with the goods ● how the goods are packaged ● how the goods are promoted or advertised, and ● how the goods are distributed. It is considered that your packaging does not actively market the salad as a prepared meal and there are no other factors that give weight to the salads being marketed as a prepared meal. Therefore, your salads are not covered by Item 4 and paragraph 38-3(1)(c) of the GST Act is not satisfied. Furthermore, the salads are not covered by any other item in Schedule 1, nor do they come within any of the other exclusions listed in section 38-3 of the GST Act. Accordingly, you are making a GST-free supply under section 38-2 of the GST Act when you sell your prepared salads. Please be advised that if the marketing of your ‘take away salads’ changes from what has been observed the GST status of your salad products may change from being a GST-free supply of food to being subject to GST.

This notice must not be taken to imply anything about: | ● the binding nature of the private advice issued to the applicant | ● the correctness of other edited versions. | Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.