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Edited version of private ruling
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Ruling
Subject: Goods and Service Tax (GST) and Dukkah
Question:
Are your supplies of dukkah GST-free?
Advice/Answers:
Yes. Your supplies of dukkah are GST-free.
Relevant facts:
You provided the following facts in your ruling application:
· You are registered for GST.
· You carry on an enterprise in Australia.
· You manufacture a range of dukkah products, and sell them in glass containers through retail outlets. Your supplies of these products are wholly within Australia.
· Dukkah is a middle-eastern food consisting of finely chopped and / or powdered dry ingredients, usually eaten in the form of a dip.
· The traditional way of eating dukkah is dipping bread in olive oil and then dipping it in dukkah.
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. Paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if it is food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act
The term food is defined for GST purposes in subsection 38-4(1) of the GST Act as any of, or a combination of any of these:
a) food for human consumption (whether or not requiring processing or treatment)
b) ingredients for food for human consumption
c) beverages for human consumption
d) ingredients for beverages for human consumption
e) goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents, and flavourings), and
f) fats and oils marketed for culinary purposes.
It is understood that you are supplying your dukkah for human consumption.
You advised that the traditional way of using dukkah is as a dip. You advised that dukkah is consumed on flat bread dipped into olive oil, and then dipped in dukkah.
After reviewing the dukkah products, the Taxation Office considers that the essential character of your varieties of dukkah is that of a condiment, seasoning or flavouring. As the essential character of your dukkah is that of a condiment, seasoning or flavouring, it is covered by paragraph 38-4(1)(e) of the GST Act, and falls within the definition of food for GST purposes.
Furthermore, the Taxation Office considers that your dukkah is not food of a kind covered by any of the items specified in the table in clause 1 of Schedule 1 to the GST Act. It should be classified as a class or genus of goods in its own right. As such, it is not excluded from being GST-free by section 38-3 of the GST Act.
Therefore your supplies of dukkah are GST-free.
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