ATO Interpretative Decision
ATO ID 2001/673 (Withdrawn)
Goods and Services Tax
GST and brandy snapsFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 brandy snaps?
Decision
No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it sells brandy snaps. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a food supplier that sells brandy snaps. A brandy snap is a thin, sticky, ginger biscuit flavoured with brandy.
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)'. Brandy snaps satisfy the definition of food in section 38-4 of the GST Act because they are 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 32 in Schedule 1 (Item 32) relates to 'Biscuit goods' and is of particular relevance.
Item 32 specifies that food that is, or consists principally of, biscuits, cookies, crackers, pretzels, cones or wafers, is not GST-free. As brandy snaps are a kind of biscuit, they are considered to be food of a kind specified in Item 32. As such, the entity is not making a GST-free supply under section 38-2 of the GST Act when it sells brandy snaps.
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 brandy snaps.
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 32
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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