Edited version of private ruling

Authorisation Number: 1011534867923

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Ruling

Subject: GST food classification of imported food

Questions

Question 1

Is your supply of B a GST-free supply?

Answer

No, your supply of B is not a GST-free supply, but a taxable supply.

Question 2

Is your supply of C a GST-free supply?

Answer

No, your supply of C is not a GST-free supply, but a taxable supply.

Question 3

Is your supply of D a GST-free supply?

Answer

No, your supply of D is not a GST-free supply, but a taxable supply.

Question 4

Is your supply of E a GST-free supply?

Answer

Yes, your supply of E is a GST-free supply.

Question 5

Is your supply of F a GST-free supply?

Answer

No, your supply of F is not a GST-free supply, but is a taxable supply (Refer to our Detailed food list on - ATO website).

Question 6

Is your supply of G a GST-free supply?

Answer

Yes, your supply of G is a GST-free supply.

Question 7

Is your supply of H a GST-free supply?

Answer

Yes, your supply of H is a GST-free supply.

Question 8

Is your supply of I a GST-free supply?

Answer

Yes, your supply of I a GST-free supply is a GST-free supply.

Question 9

Is your supply of J a GST-free supply?

Answer

Yes, your supply of J is a GST-free supply.

Relevant Facts

All the food products you are requesting a private ruling on are traditional food items that you import. You sell these food products in a grocery outlet.

You have provided the following products along with the ingredients list to be considered in this ruling:

· B

· C

· D

· E

· F

· G

· H

· I

· J

All the products are frozen.

All the products require heating or cooking and are not ready to eat. They are not takeaway foods.

There is no meat, eggs or milk content in any of the products.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 38-2,

A New Tax System (Goods and Services Tax) Act 1999 Section 38-3 and

A New Tax System (Goods and Services Tax) Act 1999 Section 38-4.

Reasons for decision

A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (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, amongst other things, food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). All of the products that are considered in this ruling are foods for human consumption and therefore, satisfy the definition of food in 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). The foods that are considered in this ruling are not specifically listed in Schedule 1. As such, the issue is whether each of these food products are a 'food of a kind' specified in Schedule 1.

The phrase 'food of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meanings were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. Accordingly, it is considered that food will be 'food of a kind' listed in Schedule 1 if it is food belonging to the same class or genus as food listed in Schedule 1.

We will examine each of the food products in turn against the items from Schedule 1 that are of most relevance.

B and C

Item 20 lists various products under the heading 'bakery products', such as 'cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings'. Of relevance in this case are 'puddings'.

The term 'pudding' is not defined in the GST Act and is therefore afforded its ordinary meaning. The ATO considers the definition of 'pudding' to be:

a cooked food that is a sweet or savoury dish made in many forms and of various ingredients, as flour (or rice, tapioca, or the like), milk and for eggs, with or without fruit, meat or other ingredients and is a cooked dish consisting of various sweet or savoury ingredients, especially as enclosed within a flour-based crust or mixed with flour, for eggs, etc., and boiled or steamed; a baked batter mixture.

Therefore, the ATO view is that 'puddings' in Schedule 1 only include those products that satisfy the above meaning. Below are examples of products that are considered to be a pudding and are not GST-free:

· rice pudding

· tapioca pudding

· self-saucing puddings

· steamed puddings

· Christmas pudding

Products that are commonly known as creamed rice, creamed rice dairy dessert or rice puddings that consist of boiled rice in a milk or cream solution, which are not baked, will be GST-free.

It should be noted that the following products are not considered to be a 'pudding' and will be GST-free:

· yoghurt

· dessert mousse (for example, chocolate)

· crème caramel

· dairy desserts

· custard

· jelly

The manufacturer's ingredient list states that B is a food that consists of two types of flour mixed in with jaggery, grated coconut, ginger powder and cardamom powder. These are mixed to form a soft dough batter mix that is wrapped in banana leaves and steamed.

B is a sweet dish that is comprised of a combination of ingredients that similarly constitute puddings, even if the seasonings (ginger powder and cardamom) reflect Indian cuisine. According to the description provided, this product is also steamed/processed in the same way that puddings are, to produce a product of pudding-like consistency. We consider that B has the characteristics that place it into the class as steamed puddings.

As puddings are included in item 20 in the 'bakery products' category of Schedule 1, B is a food that is not GST-free.

Similarly, C is a food that consists of a rice flour batter mixed in with jaggery, grated coconut, ginger powder, jackfruit and cardamom powder. This mix is wrapped in banana leaves and steamed. C is similar to B but has the additional ingredient of jackfruit. Our view is that C also fits the definition of 'pudding'. As puddings are included in item 20 in the 'bakery products' category in Schedule 1, C is a food that is not GST-free.

Clause 2 of Schedule 1 of the GST Act (Clause 2) operates to ensure that food listed at Item 20 is not GST-free regardless of whether it is supplied hot or cold, or require cooking, heating, thawing or chilling prior to consumption.

You are registered for GST and the supplies satisfy the other positive limbs of section 9-5 of the GST Act. Furthermore, the supplies are neither GST-free under any other provision of Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, you are making taxable supplies under section 9-5 of the GST Act when you supply B and C.

D

The item listed in Schedule 1 that is of relevance in this case is item 8. Item 8 lists, 'confectionery, food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery'.

The term 'confectionery' is not defined in the GST Act and is therefore afforded its ordinary meaning. 'Confectionery' is defined in the Macquarie Dictionary as 'confections or sweets collectively'.

Furthermore, Aickin J in the High Court decision Landau and Anor v. Goldwater and Anor (1976) 13 ALR 192 gave the following general description of confectionery:

'They are primarily small articles of a sweet character containing substantial amounts of sugar and regarded as being in the nature of a delicacy in whatever quantity they may be consumed.'

D is a sweet food that is traditionally eaten on special occasions. D is of a sweet character, contains sugar and is in the nature of a delicacy. In your case, that consists of a besan flour batter, which are shaped into balls, fried, dunked into thick sugar syrup, and mixed with grapes, cashew nuts and cardamom.

Accordingly, D is considered to be confectionery and falls within the scope of item 8 of Schedule 1. As such, D is not a GST-free supply under section 38-2 of the GST Act.

You are registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, you are making a taxable supply under section 9-5 of the GST Act when you sell this product.

E

The item from Schedule 1 that is of most relevance to this case is item 24, which lists 'doughnuts and croissants'.

The terms 'doughnuts' and 'croissants' are not defined in the GST Act and are therefore afforded their ordinary meanings. In the Macquarie Dictionary, the word 'doughnut' is defined to mean: 'a small ring-shaped cake of sweetened or, sometimes, of unsweetened dough fried in deep fat'. The word 'croissant' is defined to mean: 'a roll of leavened dough or puff pastry, shaped into a crescent and baked'.

E is not a pastry product nor is it baked so it is not a 'food of a kind' of croissants. E is similar to a doughnut as defined in the dictionary in terms of shape and the fact that the product is deep fried, however E does not consist of dough, which is a key ingredient of doughnuts.

E therefore falls outside the scope of Schedule 1. In addition, the supply of E, in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you this product.

F

The item listed in Schedule 1 that is of relevance in this case is item 8. Item 8 lists, 'confectionery, food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery'.

The term 'confectionery' is not defined in the GST Act and is therefore afforded its ordinary meaning. 'Confectionery' is defined in the Macquarie Dictionary as 'confections or sweets collectively'.

Furthermore, Aickin J in the High Court decision Landau and Anor v. Goldwater and Anor (1976) 13 ALR 192 gave the following general description of confectionery:

They are primarily small articles of a sweet character containing substantial amounts of sugar and regarded as being in the nature of a delicacy in whatever quantity they may be consumed.

According to the Detailed food list on the ATO website, F is considered to be a food that falls within the scope of item 8 of Schedule 1. As such, F is not a GST-free supply under section 38-2 of the GST Act.

You are registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, you are making a taxable supply under section 9-5 of the GST Act when you sell F.

G

The items from Schedule 1 that are of most relevance to this case are items 20 and 29. Item 20 of Schedule 1 lists the following products under the heading 'bakery products', such as 'cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings'. Of relevance in this case are 'cakes' and 'puddings'.

The term 'cake' is not defined in the GST Act and therefore take on their ordinary meaning.

The Macquarie Dictionary defines 'cake' to mean 'a sweet baked food in loaf or layer form, made with or without shortening, usually with flour, sugar, eggs, flavouring, usually with baking powder or soda, and a liquid'.

The G is not in loaf or layer form, rather the G are cut and filled with a mixture of jaggery and beaten rice and then battered and fried. Consequently it is not considered to be a kind of 'cake'.

As previously explained, the ATO considers the definition of 'pudding' to be:

a cooked food that is a sweet or savoury dish made in many forms and of various ingredients, as flour (or rice, tapioca, or the like), milk and for eggs, with or without fruit, meat or other ingredients and is a cooked dish consisting of various sweet or savoury ingredients, especially as enclosed within a flour-based crust or mixed with flour, for eggs, etc., and boiled or steamed; a baked batter mixture.

G are not made up of mashed G mixed with flour and is not boiled or steamed, but rather deep fried. Consequently, G are not a kind of 'pudding'.

G therefore falls outside the scope of Schedule 1. In addition, the supply of G, in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you this product.

H

The items from Schedule 1 that are of most relevance to this case are items 22, 23 and 25 of Schedule 1.

Item 22 of Schedule 1 lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'. All of these products are baked. Therefore, in order for H to belong to the same class of food as 'pies (meat, vegetable or fruit), pasties and sausage rolls' they need to be baked. As H are fried they are not considered to be 'food of a kind' known as 'pies (meat, vegetable or fruit), pasties and sausage rolls'.

Item 23 of Schedule 1 lists 'tarts and pastries'. After consultation with The Food Consultative Committee it is considered that the reference to 'tarts and pastries' in item 23 of Schedule 1 is to sweet and not savoury pastries. Moreover, item 23 of Schedule 1 is not intended to be a catch all provision for all products that are made from pastry. As such, H are not 'food of a kind' known as pastries.

Item 25 of Schedule 1 lists 'pastizzi, calzoni and brioche'. All of these products are baked. Therefore, in order for H to belong to the same class as 'pastizzi, calzoni and brioche' they need to be baked. As H are fried, they are not considered to be 'food of a kind' known as 'pastizzi, calzoni and brioche'.

H therefore fall outside the scope of Schedule 1. In addition, the supply of H in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you sell this product.

J

The items from Schedule 1 that is of most relevance to this case is item 20. Item 20 lists various products under the heading 'bakery products', such as 'cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and puddings'. Of relevance in this case are 'cakes' and 'puddings'.

The products listed under item 20 of Schedule 1 are not defined in the GST Act and therefore take on their ordinary meaning.

The Macquarie Dictionary defines 'cake' to mean 'a sweet baked food in loaf or layer form, made with or without shortening, usually with flour, sugar, eggs, flavouring, usually with baking powder or soda, and a liquid'.

The J is not in loaf or layer form and does not contain eggs, baking powder or soda. Consequently the J is not considered to be a kind of cake for the purposes of Item 20.

As previously explained, the ATO considers the definition of 'pudding' to be:

a cooked food that is a sweet or savoury dish made in many forms and of various ingredients, as flour (or rice, tapioca, or the like), milk and for eggs, with or without fruit, meat or other ingredients and is a cooked dish consisting of various sweet or savoury ingredients, especially as enclosed within a flour-based crust or mixed with flour, for eggs, etc., and boiled or steamed; a baked batter mixture.

J is a food that consists of green gram (mung beans) mixed in with jaggery, grated coconut, ginger powder and cardamom powder and is boiled. Small balls of this mix are then put into a prepared batter of rice flour and deep fried. The ingredients used in J are not ingredients used in puddings, nor is it subject to a cooking process similarly used for puddings. Because J is a food that has been deep fried, our view is that J does not fit the dictionary definitions of what a pudding is.

J therefore falls outside the scope of Schedule 1. In addition, the supply of J, in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you this product.

K

The items from Schedule 1 that are of most relevance to this case are items 22, 23 and 25 of Schedule 1.

Item 22 of Schedule 1 lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'. All of these products are baked. Therefore, in order for K to belong to the same class of food as 'pies (meat, vegetable or fruit), pasties and sausage rolls' they need to be baked. As K are fried they are not considered to be 'food of a kind' known as 'pies (meat, vegetable or fruit), pasties and sausage rolls'.

Item 23 of Schedule 1 lists 'tarts and pastries'. After consultation with The Food Consultative Committee it is considered that the reference to 'tarts and pastries' in item 23 of Schedule 1 is to sweet and not savoury pastries. Moreover, item 23 of Schedule 1 is not intended to be a catch all provision for all products that are made from pastry. As such, K are not 'food of a kind' known as pastries.

Item 25 of Schedule 1 lists 'pastizzi, calzoni and brioche'. All of these products are baked. Therefore, in order for K to belong to the same class as 'pastizzi, calzoni and brioche' they need to be baked. As K are fried, they are not considered to be 'food of a kind' known as 'pastizzi, calzoni and brioche'.

K therefore fall outside the scope of Schedule 1. In addition, the supply of K, in this case, does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you sell K.

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