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ATO Interpretative Decision

ATO ID 2004/622

Goods and Services Tax

GST and bovine colostrum powder
FOI status: may be released

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 bovine colostrum powder as food for human consumption?

Decision

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies bovine colostrum powder as food for human consumption.

Facts

The entity is a food supplier. The entity supplies bovine colostrum powder. Bovine colostrum is derived from the first milking of dairy cows and freeze dried to form a powder.

Bovine colostrum powder is high in protein and other nutrients. It has a variety of uses including food for human consumption, pharmaceuticals and in animal feed. The entity in this case is supplying bovine colostrum powder as food for human consumption.

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). Bovine colostrum powder that is supplied as food for human consumption satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act.

However, under paragraph 38-3(1)(c) of the GST Act, 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). Bovine colostrum powder is not food of a kind specified in Schedule 1.

In addition, the supply of bovine colostrum powder 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 bovine colostrum powder as food for human consumption.

Note: Bovine colostrum powder can be used for other purposes such as in pharmaceuticals or as animal feed. Where bovine colostrum powder is supplied as a pharmaceutical ingredient or as animal feed, that supply will not be a GST-free supply of food under section 38-2 of the GST Act.

Date of decision:  7 July 2004

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

Keywords
Goods and services tax
GST free
GST food
Food for human consumption
Ingredients for food

Siebel/TDMS Reference Number:  4041485

Business Line:  Indirect Tax

Date of publication:  30 July 2004

ISSN: 1445-2782


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