ATO Interpretative Decision

ATO ID 2001/691

Goods and Services Tax

GST and frozen meat or vegetable croquettes
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 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 frozen meat or vegetable croquettes?

Decision

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells frozen meat or vegetable croquettes.

Facts

The entity is a food supplier that sells meat croquettes and vegetable croquettes. These food products are sold in a frozen state, as food for human consumption.

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

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 is not excluded by 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). In this case, frozen meat croquettes and vegetable croquettes are supplied as food for human consumption, and therefore satisfy 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). Frozen meat croquettes and frozen vegetable croquettes do not fall under any item in Schedule 1.

In addition, the supply of the frozen meat croquettes and vegetable croquettes does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the entity is making a GST-free supply when it sells frozen meat or vegetable croquettes under section 38-2 of the GST Act.

Date of decision:  8 November 2001

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

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

Business Line:  GST

Date of publication:  30 November 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 8 November 2001 Original statement
  7 October 2005 Archived

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