Ruling Compendium GSTD 2008/2EC







The edited version of the Compendium of Comments is a Tax Office communication that is not intended to be relied upon. | In accordance with PS LA 2008/3 it only affords level 3 protection. | Summary of issues raised and responses: This is a compendium of responses to the issues raised by external parties to draft GSTD 2008/D1 - Goods and services tax: are supplies of food known as breakfast bars GST-free? | This compendium of comments has been edited to maintain the anonymity of entities that commented on the draft ruling. | Tax Office Response/Action taken | The decision to treat Breakfast Bars as taxable should be a prospective. Prospective treatment would ensure consistency with previous decisions of the Tax Office in circumstances where classification decisions on specific foodstuffs or food groups have been unduly protracted. Examples include 'fish in sauce' and pita crisps. | Tax Office will implement the view in the final Determination for transactions that occur on or after the date of issue. See also response to Issue 5 below. | The Tax Office does not consider that discussion on the possibility that food known as breakfast bars might be combination of food items in Schedule 1 would add value to the Determination as the relevant item for these products is Item 11. Given that paragraph 38-3(1)(c) contains two alternatives and that the conclusion reached is that food known as breakfast bars fall within Item 11, it is considered unnecessary to discuss whether food known as breakfast bars may be a combination of food that is listed in the table in clause 1 of Schedule 1. | The Tax Office does not consider that any discussion of the application of the second column headings would add value to the Determination. | Item 11 of Schedule 1 to the GST Act states 'and similar foodstuffs'. There is no requirement for food known as breakfast bars to be the 'same' or have the 'same' characteristics as muesli bars or health food bars. So long as food known as breakfast bars is similar to muesli bars (or health food bars), Item 11 is satisfied. The Determination advises that in the view of the Tax Office they are similar. | A marketing test is a subjective test and not itself determinative. In considering the relevance of a marketing test, it was thought its application would result in inconsistent conclusions as to the GST treatment of a product. The terms 'muesli bar' and 'health food bar' are those ordinarily used by sellers and consumers and in the Commissioner's view, these terms therefore indicate classes of products. As such the Commissioner considers that the ordinary usage of these terms is more appropriate in determining whether food known as breakfast bars fall within Item 11. Paragraph 5 of GSTD 2008/D1 and the final Determination explain that words 'known as' in Item 11 do not indicate a specific marketing test. | Where the GST Food Guide refers to 'cereals which have been rolled or flattened into shapes' it is referring to products such as Weet-Bix and Vita or Oat Brits that are regarded as breakfast cereals that are sold in biscuit shape. Clause 5 in Schedule 1 of the GST Act provides that these forms of biscuit goods are GST-free. | The Tax Office should not seek retrospective adjustments where a supplier has supplied GST-free a product which is covered by a GST-free ruling. | Industry suggested that 60 days is adequate for implementation. The Tax Office will adopt the 60 days implementation time frame as suggested by the industry.