ATO Interpretative Decision

ATO ID 2001/564 (Withdrawn)

Goods and Services Tax

• The ATO view is covered in the 'GST food guide - Part 3 - Detailed food list (fruit - fresh, dried, canned)'.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the entity, a food supplier, making a GST-free supply under section 38-2 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells Greek whole fruits in syrup?

Decision

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells Greek whole fruits in syrup.

Facts

The entity is a food supplier. The entity sells Greek whole fruits in syrup. A variety of fruits, including cherries, figs, and quince, are sold.

The Greek whole fruits in syrup are not marketed as confectionery; are not ingredients for confectionery or food consisting principally of confectionery.

The entity is registered for goods and services tax (GST).

Reasons for Decision

Under section 38-2 of the GST Act a supply of 'food' is GST-free. 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). Greek whole fruits in syrup 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). The items that are relevant to this case are items 8 of Schedule 1 (Item 8) and item 12 of Schedule 1 (Item 12).

Item 12 lists crystallised fruit, glace fruit and drained fruit.

Greek whole fruits in syrup are not fruit products as described in Item 12 and are therefore not covered by that item.

Item 8 lists confectionery, food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery. The products are not marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery. The issue is, therefore, whether or not Greek whole fruits in syrup are confectionery.

The term 'confectionery' is not defined in the GST Act. However, Aickin J in the High Court decision Landau and Anor. v Goldwater and Anor (13 ALR 192) gave the following general description of confectionery:

'They are primarily small articles of a sweet character containing substantial amounts of sugar and regarded as being in the nature of a delicacy in whatever quantity they may be consumed.'

Greek whole fruits in syrup are not primarily small articles of a sweet character containing substantial amounts of sugar and are not regarded as a delicacy in whatever quantity they are consumed. Additionally, although the Greek whole fruits are presented in sweet syrup, this is not enough to make this product a confectionery product. Therefore, Greek whole fruits in syrup are not covered by Item 8 of Schedule 1.

As such, Schedule 1 does not exclude Greek whole fruits in syrup from being GST-free. Therefore, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells Greek whole fruits in syrup.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 38-2
   paragraph 38-3(1)(c)
   paragraph 38-4(1)(a)
   Schedule 1 clause 1
   Schedule 1 clause 1 table Item 8
   Schedule 1 clause 1 table Item 12

Case References:
Landau and Anor v. Goldwater and Anor
   (1976) 13 ALR 192

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

Business Line:  GST

Date of publication:  7 November 2001

ISSN: 1445-2782