ATO Interpretative Decision
ATO ID 2003/857 (Withdrawn)
Goods and Services Tax
GST and the supply of mixed fruit with glacé cherriesFOI status: may be released
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The ATO view for this issue is covered in Goods and Service Tax Determination GSTD 2024/1 Goods and services tax: supplies of combination food.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision withdrawn 28 February 2024.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 mixed dried fruit with glacé cherries?
Decision
No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it supplies mixed dried fruit with glace cherries. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a food supplier. The entity supplies mixed dried fruit with glace cherries.
The product is a mixture of dried fruit and glace cherries that is used predominantly to make fruit cakes and puddings. The mixture consists of sultanas, currants, raisins, candied peel and glace cherries with dressing oil. The dried fruits and glace cherries in the mixture retain their separate identities as sultanas, candied peel, currants, raisins and glace cherries.
The entity is registered for goods and services tax (GST). The supply satisfies the other positive limbs of section 9-5 of the GST Act.
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 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 (paragraph 38-4(1)(a) of the GST Act). Sultanas, currants, raisins, candied peel and glace cherries are food. Therefore, a mixture of these products satisfies the definition of food contained 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1), or food that is a combination of one or more foods at least one of which is food of such a kind.
As the dried fruits and glace cherries in the mixture retain their separate identities, they are a combination of foods. Therefore it is necessary to consider whether one or more of those foods is food of a kind specified in Schedule 1.
Sultanas, currants and raisins are not food of a kind specified in Schedule 1. Item 12 in Schedule 1 (Item 12) specifies 'crystallised fruit, glace fruit and drained fruit'. Although the candied peel could be considered to be similar to crystallised fruit, clause 4 of Schedule 1 provides that none of the items in the table relating to the category of confectionery includes candied peel. However, as the glace cherries are glace fruit, they are food of a kind specified in Item 12.
Therefore, the mixed dried fruit with glace cherries is a combination of foods, one of which (the glace cherries) is food of a kind specified in Schedule 1. This means that the supply of the mixed dried fruit is not GST-free due to the operation of paragraph 38-3(1)(c) of the GST Act.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under any other provision of Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies mixed dried fruit with glace cherries.
Date of decision: 15 August 2003
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
section 38-2
section 38-3
paragraph 38-3(1)(c)
section 38-4
paragraph 38-4(1)(a)
Division 40
Schedule 1 clause 1
Schedule 1 clause 1 table item 12
Schedule 1 clause 4
Keywords
Goods and services tax
GST food
Food for human consumption
Ingredients for food
GST supplies and acquisitions
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 15 August 2003 | Original statement | |
| You are here → | 28 February 2024 | Archived |