ATO Interpretative Decision
ATO ID 2001/679
Goods and Services Tax
GST and prepared salad not marketed as a prepared mealFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 sells prepared salads that are not marketed as a prepared meal?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells prepared salads that are not marketed as a prepared meal.
Facts
The entity is a food supplier. The entity is supplying various packaged, prepared salads in meal size quantities.
The salads are not marketed as a prepared meal.
The salads are not sold for consumption on the premises from which they are supplied. The salads are not hot food for consumption away from the premises.
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 it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in section 38-3 of the GST Act.
The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The salads are food for human consumption. Therefore, the prepared salads fall within the meaning of food in section 38-4 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). Of specific relevance is item 4 of Schedule 1 (Item 4), which provides that food marketed as a prepared meal (but not including soup) is not GST-free.
In this case, the prepared salads are not marketed as a prepared meal. Therefore, the salads are not covered by Item 4. Furthermore, the salads are not covered by any other item in Schedule 1, nor do they come within any of the other exclusions listed in section 38-3 of the GST Act. Accordingly, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells prepared salads.
Date of decision: 2 October 2001
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 4
Other References:
Food Index
Food Industry Issues Register - Issue No. 5
Keywords
Goods & services tax
GST free
GST food
Food for human consumption
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 2 October 2001 | Original statement |
| 7 October 2005 | Archived |