ATO Interpretative Decision

ATO ID 2002/262 (Withdrawn)

Goods and Services Tax

GST and organic powdered fruit
FOI status: may be released

Withdrawn. The ATO view for this issue is covered in the GST food guide - Section 3 - Detailed food list.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 organic powdered fruit?

Decision

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act, when it sells organic powdered fruit.

Facts

The entity is a food supplier. The entity sells organic powdered fruit.

The fruit powder can be added to cakes and other baked or cooked food for flavour.

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 provided that it does not come within any of the exclusions listed in section 38-3 of the GST Act.

Section 38-4 of the GST Act defines food for the purposes of section 38-2 of the GST Act. Of most relevance to this case is paragraph 38-4(1)(b) of the GST Act.

Paragraph 38-4(1)(b) of the GST Act provides that food includes ingredients for food for human consumption. Organic powdered fruit is considered to be an ingredient for food for human consumption under paragraph 38-4(1)(b) 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 that is specified in clause 1 of Schedule 1 to the GST Act (Schedule 1). Organic powdered fruit does not fall within any of the items listed in Schedule 1.

In addition, the supply of organic powdered fruit 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 under section 38-2 of the GST Act when it sells organic powdered fruit.

Date of decision: 28 August 2001

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

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

Business Line: GST

Date of publication: 22 March 2002

ISSN: 1445-2782

history

	Date:	Version:
	28 August 2001	Original statement
You are here	3 February 2006	Archived

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