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Edited version of private ruling
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Ruling
Subject: Goods and services tax (GST) and supply of food products
Question
Is GST payable by you on your sale of the specified products (the products)?
Answer: No.
Relevant facts and circumstances
You are registered for GST.
You are a food manufacturing and distribution company, and you supply your products to supermarkets and retailers.
You make the products available in Australia to your customers.
You sell the products under a certain marketing concept.
You have provided details of the products.
You do not market the products as prepared meals.
You do not supply the products on platters.
You do not supply the products for consumption on the premises from which you supply them.
Reasons for decision
Summary
GST is not payable on your sales of the products 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.
(*denotes a term that is defined in section 195-1 of the GST Act)
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 products 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 products in question would be input taxed.
Therefore, what remains to be determined is whether your sales of the products 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 products are food for human consumption. Therefore, they satisfy 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 if food of such a kind, is not GST-free under section 38-2 of the GST Act.
The products are not covered by any of the items listed in the table in clause 1 of Schedule 1 to the GST Act.
Hence, the exclusion at paragraph 38-3(1)(c) of the GST Act does not apply. Additionally, no other exclusions in section 38-3 of the GST Act apply. Therefore, your supplies of the products are GST-free supplies of food under section 38-2 of the GST Act. Hence, your sales of these products are not taxable supplies, and therefore, GST is not payable on these sales.
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