TAXATION RULING NO. ST 2226
ST 2226
SALES TAX : DANDELION BEVERAGES
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FOI status:
May be releasedFOI number: I 1077807PREAMBLE
Sub-item 35A(1) in the First Schedule to the Sales Tax (Exemptions and Classifications) Act exempts from sales tax tea and preparations that are marketed exclusively, or primarily and principally, as tea preparations, being preparations for potable use the ingredients of which consist principally of tea or principally of -
- a)
- tea; and
- b)
- milk, milk powder, milk substitute or any other substance of a kind ordinarily used as a beverage whitener, sugar or any other sweetener, or a mixture of any 2 or more of those goods.
2. Sub-item 35A(5) exempts preparations that are of a kind marketed exclusively or principally as coffee substitutes and consist principally of cereals or cereal products.
3. There are a number of products on the market which are known commercially as dandelion coffee, dandelion beverage and dandelion tea. They are made from the root of a special dandelion plant and being caffeine free are suitable for use by persons requiring a caffeine free beverage for medical reasons. Dandelion tea is marketed as an alternative to "black tea" and dandelion coffee or dandelion beverage are similar in appearance to instant coffee and are marketed as a substitute for coffee.
RULING
4. Dandelion tea is "tea" for the purposes of sub-item 35A(1), First Schedule and is exempt from sales tax.
5. Dandelion coffee and dandelion beverage are preparations that are marketed as coffee substitutes but they do not consist principally of cereal or cereal products. They are not exempt under sub-item 35A(5), First Schedule, but are taxable at the general rate of 20%.
COMMISSIONER OF TAXATION
4 April 1986