ATO Interpretative Decision

ATO ID 2002/983 (Withdrawn)

Goods and Services Tax

GST and supply of sachets of soy sauce and wasabi
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 supplies condiments such as sachets of soy sauce and wasabi?

Decision

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies condiments such as sachets of soy sauce and wasabi.

Facts

The entity is a food supplier. The entity supplies condiments such as sachets of soy sauce and wasabi.

The entity supplies the condiments as seasoning to be added to food after preparation.

The condiments are not sold for consumption on the premises from which they are supplied

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 the product satisfies the definition of food in section 38-4 of the GST Act and the supply is not excluded from being GST-free by section 38-3 of the GST Act.

Food is defined in section 38-4 of the GST Act to include goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings) (paragraph 38-4(1)(e) of the GST Act). The condiments are supplied as seasoning to be added to food after preparation. Therefore, they are goods to be mixed with or added to 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Condiments such as soy sauce and wasabi do not fall under any item in Schedule 1.

The condiments are not sold for consumption on the premises from which they are supplied. In addition, condiments such as soy sauce and wasabi do 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 supplies condiments such as sachets of soy sauce and wasabi.

Date of decision:  10 April 2002

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)(e)
   Schedule 1 clause 1

Keywords
Goods and services tax
GST free
GST food
Food seasoning

Business Line:  GST

Date of publication:  23 October 2002

ISSN: 1445-2782

history
  Date: Version:
  10 April 2002 Original statement
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