ATO Interpretative Decision
ATO ID 2001/672 (Withdrawn)
Goods and Services Tax
GST and gingerbreadFOI status: may be released
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The ATO view is covered in the 'GST food guide - Part 3 - Detailed food list'.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 gingerbread?
Decision
No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it sells gingerbread. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a food supplier that sells gingerbread. Gingerbread is a kind of cake, flavoured with ginger and treacle or golden syrup.
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 it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions listed in 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)'. Gingerbread satisfies the definition of food in section 38-4 of the GST Act because it is food for human consumption.
However, paragraph 38-3(1)(c) of the GST Act provides that 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). Item 20 in Schedule 1 (Item 20) relates to 'Bakery products' and is of particular relevance.
Item 20 specifies that cakes, slices, cheesecakes, pancakes and waffles are not GST-free. As gingerbread is a kind of cake, it is considered to be food of a kind specified in Item 20. As such, the entity is not making a GST-free supply under section 38-2 of the GST Act when it sells gingerbread.
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 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 sells gingerbread.
Date of decision: 23 March 2000
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 20
Keywords
Goods & services tax
GST free
GST food
Food for human consumption
ISSN: 1445-2782
| Date: | Version: | |
| 23 March 2000 | Original statement | |
| You are here | 7 October 2005 | Archived |
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