GST issues registers
Food industry partnershipIssue 9 – Fats and oils
Non-interpretative - straight application of the law.
'Food' is defined in subsection 38-4(1)(f) of the GST Act to include fats and oils marketed for culinary purposes - paragraph 38-4(1)(f). Therefore, the marketing of the fats and oils will determine their GST status. If the fats and oils are marketed as being for culinary purposes they will satisfy the definition of food in subsection 38-4(1)(f) of the GST Act and will be GST-free.
Example
A manufacturer produces peanut oil that is bottled and marketed for use as a cooking oil. This oil will satisfy the definition of food in paragraph 38-4(1)(f) of the GST Act and will be GST-free.
Example
The same manufacturer produces lavender oil that is bottled and marketed as an essential oil for use in aromatherapy. This oil is not marketed for culinary purposes and therefore fails to satisfy the definition of food in subsection 38-4(1) of the GST Act and will be subject to GST.
© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).