ATO Interpretative Decision
ATO ID 2004/434
Goods and Services Tax
GST and canned boiled nutsFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a food supplier, making a GST-free supply under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies canned boiled nuts?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies canned boiled nuts.
Facts
The entity is a food supplier. The entity supplies canned boiled nuts.
The canned boiled nuts do not require further cooking before being eaten and are often used in stir-fried dishes.
The entity is registered for goods and services tax (GST).
Reasons for Decision
A supply of food is GST-free under section 38-2 of the GST Act if the product satisfies the definition of food in section 38-4 of the GST Act and the supply is not excluded from being GST-free by section 38-3 of the GST Act.
Food is defined in section 38-4 of the GST Act to include food for human consumption, (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). Canned boiled nuts are food for human consumption and therefore satisfy the definition of food in paragraph 38-4(1)(a) of the GST Act.
However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if it is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1).
Item 16 of Schedule 1 (Item 16) specifies that seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way are not GST-free. Boiled nuts are not considered to have been processed or treated in a way similar to the processes listed in Item 16 and are therefore not covered by this item. Accordingly, the excluding provisions of paragraph 38-3(1)(c) of the GST Act do not apply.
In addition, the supply of canned boiled nuts does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies canned boiled nuts.
Date of decision: 4 October 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 38-2
section 38-3
paragraph 38-3(1)(c)
section 38-4
paragraph 38-4(1)(a)
Schedule 1 clause 1
Schedule 1 clause 1 table item 16
Keywords
Goods and services tax
GST free
GST food
Food for human consumption
ISSN: 1445-2782