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Edited version of private ruling
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Ruling
Subject: Goods and services tax (GST) and supply of poached eggs
Question
Is GST payable on your sales of poached eggs to X?
Answer: No.
Relevant facts and circumstances
You are registered for GST.
You sell poached eggs to X.
You deliver the poached eggs in Australia to X's kitchen.
X then incorporates the eggs into meals, which it serves to its customers.
You supply the poached eggs on their own.
Reasons for decision
Summary
GST is not payable on your sales of poached eggs to X as the sales are GST-free under section 38-2 of the A New Tax System (Goods and Services Act) 1999 (GST Act).
Detailed reasoning
GST is payable on your taxable supplies.
You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:
You make a taxable supply if:
a) you make the supply for *consideration; and
b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
c) the supply is *connected with Australia; and
d) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
In your case, you satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you supply the poached eggs for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies are connected with Australia and you are registered for GST.
There are no provisions in the GST Act or any other Act under which your sales of the poached eggs are input taxed.
Therefore, what remains to be determined is whether your sales of the poached eggs are GST-free.
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 food for human consumption (paragraph 38-4(1)(a) of the GST Act).
The poached eggs are food for human consumption. Therefore, they meet the definition of food in paragraph 38-4(1)(a) of the GST Act.
Paragraph 38-3(1)(c) of the GST Act provides that a supply of food of a kind specified in the third column of the table in clause 1 of Schedule 1 to the GST Act, or food that is a combination of one or more foods at least one of which is food of such a kind, is not GST-free under section 38-2 of the GST Act.
The poached eggs are not food of a kind specified in the third column of the table in clause 1 of Schedule 1 to the GST Act or food that is a combination of one or more foods at least one of which is food of such a kind.
Hence, the poached eggs are not caught by the exclusion at paragraph 38-3(1)(c) of the GST Act.
These poached eggs are not caught by any other exclusion in subsection 38-3(1) of the GST Act. Therefore, your sales of the poached eggs are GST-free under section 38-2 of the GST Act.
Hence, your sales of the poached eggs are not taxable supplies, and therefore, GST is not payable on these sales.
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