ATO Interpretative Decision
ATO ID 2001/173
Goods and Services Tax
GST and SamosasFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 sells samosas?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells samosas.
Facts
The entity is a food supplier. In this case, the entity is selling samosas.
Samosas are a savoury pastry product filled with curried meat and/or vegetables. They are usually triangular in shape. Samosas are fried.
The samosas are not sold for consumption on the premises from which they are supplied. The entity does not supply the samosas as hot food for consumption away from those 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 is not excluded by section 38-3 of the GST Act.
Food is defined in paragraph 38-4(1)(a) of the GST Act to include 'food for human consumption (whether or not requiring processing or treatment)'. Samosas are food for human consumption.
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 clause 1 of Schedule 1 to the GST Act (Schedule 1). Samosas are not specifically listed in Schedule 1. As such, the issue in this case is whether samosas are 'food of a kind' specified in Schedule 1.
The phrase 'food of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meanings were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. Accordingly, it is considered that food will be 'food of a kind' listed in Schedule 1 if it is food belonging to the same class or genus as food listed in Schedule 1. The items from Schedule 1 that are of most relevance to this case are items 22, 23 and 25 of Schedule 1.
Item 22 of Schedule 1 lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'. All of these products are baked. Therefore, in order for samosas to belong to the same class of food as 'pies (meat, vegetable or fruit), pasties and sausage rolls' they need to be baked. As samosas are fried they are not considered to be 'food of a kind' known as 'pies (meat, vegetable or fruit), pasties and sausage rolls'.
Item 23 of Schedule 1 lists 'tarts and pastries'. After consultation with The Food Consultative Committee it is considered that the reference to 'tarts and pastries' in item 23 of Schedule 1 is to sweet and not savoury pastries. Moreover, item 23 of Schedule 1 is not intended to be a catch all provision for all products that are made from pastry. As such, samosas are not 'food of a kind' known as pastries.
Item 25 of Schedule 1 lists 'pastizzi, calzoni and brioche'. All of these products are baked. Therefore, in order for samosas to belong to the same class as 'pastizzi, calzoni and brioche' they need to be baked. As samosas are fried, they are not considered to be 'food of a kind' known as 'pastizzi, calzoni and brioche'.
Samosas therefore fall outside the scope of Schedule 1. In addition, the supply of samosas, in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. The entity is therefore making a GST-free supply under section 38-2 of the GST Act when it sells samosas.
Date of decision: 22 January 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, item 22
Schedule 1, Clause 1, item 23
Schedule 1, Clause 1, item 25
Case References:
Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW)
13 FCR 396
Other References:
Food Industry Issues Register - Issue No.30
Keywords
Goods & Services tax
GST-free
GST food
Food for human consumption
ISSN: 1445-2782