Private ruling: GST and importation of 100% freeze dried fruit powder
Date of advice: 1 April 2016
Published: May 2016

Ruling: Q1: Is GST payable on the importation of 100% freeze dried fruit powder (fruit powder)? | A1: No, GST is not payable on the importation of the fruit powder.

Relevant facts and circumstances: You are a sole trader registered for an Australian Business Number (ABN) but not for GST. You import 100% freeze dried fruit powder to be mixed with food or beverages e.g. baking food or in milk smoothies such as dairy, soy, almond, rice and coconut. The fruit powder will provide flavouring and nutrients for the food and milk. You will advertise the fruit powder as a super food under the brand name of XXX. In the ingredients list you have listed it as 100% freeze dried fruit as you are not using any additives. You state that the manufacturer describes the freeze dried process as: The raw materials are prepared and frozen solid, and then freeze dried in a vacuum chamber. Under this process, water contained as ice in the cells of products will be converted to be steam, while the shape, size, color and other properties are retained in the products. Following the freeze drying of the specific fruit, it is put through a milling machine to turn it into a powder. Nothing is added or taken out. The nutritional value will be provided on the back of the packaging including various health benefits and show respective amounts of the following: • Energy • Protein • Fat • Carbohydrates • Sugars • Dietary fibre • Sodium • Calcium • Iron

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 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 13-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 13-10

Reasons for decision: Summary: Under section 38-2 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a supply of food is GST-free. The definition of food is defined in section 38-4 of the GST Act and includes food for human consumption (whether or not it requires processing or treatment) and ingredients for food for human consumption. The fruit powder is an ingredient for food for human consumption and therefore satisfies the definition of food under section 38-4 of the GST Act. However, under paragraph 38-3(1)(c) of the GST Act, certain supplies of food are not GST-free if it is food of a kind specified in the third column of the table in Schedule 1 of the GST Act (Schedule 1), or food that is a combination of one or more foods at least one of which is food of such a kind. The fruit powder is not food listed, or of a kind listed, at any of the items in Schedule 1. Also, the fruit powder is not food that is a combination of one or more foods at least one of which is food of such a kind. Therefore the fruit powder is not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. The fruit powder is also not excluded from being GST-free by virtue of any of the other paragraphs of subsection 38-3(1) of the GST Act therefore your supply of the fruit powder will be GST-free under section 38-2 of the GST Act. The status of the supply of the fruit powder is relevant in determining the GST status of its importation. Subsection 13-5(1) of the GST Act states: You make a taxable importation if: (a) goods are imported; and (b) you enter the goods for home consumption (within the meaning of the Customs Act 1901 ). However, the importation is not a taxable importation to the extent that it is a *non-taxable importation. Section 13-10 of the GST Act states: An importation is a non-taxable importation if: (a) it is a non-taxable importation under Part 3-2 of the GST Act, or (b) it would have been a supply that was *GST-free or *input taxed if it had been a supply. As your supply of the fruit powder will be GST-free, your importation of the fruit powder is a non-taxable importation under paragraph 13-10(b) of the GST Act. GST will not be payable on your importation of the 100% freeze dried specific fruit powder.