ATO Interpretative Decision

ATO ID 2001/201

Goods and Services Tax

GST and meat supplied as pet food
FOI status: may be released

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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 meat 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 fresh, chilled or frozen meat as pet food?

Decision

No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it supplies fresh, chilled or frozen meat as pet food. The entity is making a taxable supply under section 9-5 of the GST Act.

Facts

The entity is a meat supplier. The entity sells fresh, chilled and frozen meat that is marketed as pet food.

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

Section 38-2 of the GST Act states that 'a supply of food is GST-free'.

Paragraph 38-4(1)(a) of the GST Act defines food to include 'food for human consumption (whether or not requiring processing or treatment)'. As the phrase 'food for human consumption' is not defined in the GST Act, it takes its ordinary meaning. It is considered that the ordinary meaning of the phrase 'food for human consumption' excludes food sold as pet food.

Paragraph 15AB(1)(a) of the Acts Interpretation Act 1901 provides that consideration may be given to material not forming part of an Act to confirm that the meaning of a provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purposes or object underlying the Act. Paragraph 15AB(2)(e) of the Acts Interpretation Act 1901 provides that any explanatory memorandum relating to the Bill containing the provision is extrinsic material that may be considered for this purpose.

According to paragraph 1.13 of the Further Supplementary Explanatory Memorandum relating to the A New Tax System (Goods and Services Tax) Bill 1998 (EM), 'food' does not include food that is marketed for animals (for example, pet food) as it is not considered to be 'food for human consumption'. As such, the EM confirms that on its ordinary meaning, the phrase 'food for human consumption' is interpreted to exclude food marketed as food for animals. Therefore, the supply of fresh, chilled and frozen meat as pet food is not the supply of 'food for human consumption' under paragraph 38-4(1)(a) of the GST Act.

As fresh, chilled and frozen meat marketed as pet food does not satisfy the definition of 'food' under paragraph 38-4(1)(a) of the GST Act, its supply is not GST-free under section 38-2 of the GST Act.

In this case, the entity is registered for GST and the supply meets the positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under 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.

[Note: The supply of fresh, chilled or frozen meat as pet food is not a GST-free supply regardless of whether the meat is sold by a pet shop, butcher or a supermarket. However, food that is marketed for human consumption and is supplied as food for human consumption that is subsequently consumed by a pet, is a GST-free supply under section 38-2 of the GST Act.]

Date of decision: 12 January 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   section 38-2
   paragraph 38-4(1)(a)
   Division 40

Acts Interpretation Act 1901
paragraph 15AB(1)(a)
paragraph 15AB(2)(e)

Other References:
Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 paragraph 1.13

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

Business Line: GST

Date of publication: 14 August 2001

ISSN: 1445-2782

history

	Date:	Version:
You are here	12 January 2001	Original statement
	5 December 2008	Archived

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