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Edited version of private ruling

Authorisation Number: 1011641716131

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Ruling

Subject: Goods and services tax (GST) and food

Question 1

Will GST be payable on your sales of pizza bases with toppings (as detailed in the facts)?

Answer

Yes.

Question 2

Will GST be payable on your sales of the rice ball product?

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You carry on a business of selling food.

You will sell pizza bases with toppings (as detailed in the facts) and a rice ball product.

You will deliver the pizza bases with toppings (as detailed in the facts) and the rice ball product in Australia to your customers.

The pizza bases will have a sauce and typical pizza toppings such as certain things. The toppings will be more than 30% of the products' depths.

The pizza bases with toppings (as detailed in the facts) will not be able to be cut and filled.

The rice ball product will contain rice and certain other ingredients.

The rice ball product will be an accompaniment to a meal.

The rice ball product will weigh a certain amount.

The rice ball product would be placed in or near a deli section in a supermarket.

The rice ball product will not be marketed as a prepared meal.

You will not supply the pizza bases with toppings (as detailed in the facts) and the rice ball product for consumption on the premises from which you will supply them.

Reasons for decisions

Question 1

Summary

Your sales of pizza bases with toppings (as detailed in the facts) will not be GST-free supplies of food under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

GST will be payable on your sales of pizza bases with toppings (as detailed in the facts), as all of the requirements of section 9-5 of the GST Act will be satisfied.

Detailed reasoning

GST is payable by you on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the

GST Act, which states:

(*Denotes a term that is defined in section 195-1 of the GST Act)

In your case, you will satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you will supply the pizza bases with toppings (as detailed in the facts) for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies will be connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your sales of pizza bases with toppings (as detailed in the facts) will be input taxed supplies.

Therefore, what remains to be determined is whether your sales of the pizza bases with toppings (as detailed in the facts) will be GST-free supplies.

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 pizza bases with toppings (as detailed in the facts) will be food for human consumption. Therefore, they will 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.

Item 3 in the table in clause 1 of Schedule 1 to the GST Act lists pizzas amongst other things (item 3).

The pizza bases with toppings (as detailed in the facts) will be pizzas. Therefore, they will be covered by item 3.

Hence, the exclusion at paragraph 38-3(1)(c) of the GST Act will apply. Therefore, your sales of pizza bases with toppings (as detailed in the facts) will not be GST-free supplies under section 38-2 of the GST Act. There are no other provisions of the GST Act under which your sales of these products will be GST-free supplies. Hence, as all of the requirements of section 9-5 of the GST Act will be satisfied, your sales of these products will be taxable supplies, and therefore, GST will be payable on your sales of these products.

Question 2

Summary

GST will not be payable on your sales of the rice ball product, as they will be GST-free supplies of food under section 38-2 of the GST Act.

Detailed reasoning

GST is payable by you on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

In your case, you will satisfy the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. That is, you will supply the rice ball product for consideration and in the course or furtherance of an enterprise that you carry on. Additionally, these supplies will be connected with Australia and you are registered for GST.

There are no provisions in the GST Act under which your sales of the rice ball product will be input taxed supplies.

Therefore, what remains to be determined is whether your sales of the rice ball product will be GST-free supplies.

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 rice ball product will be food for human consumption. Therefore, it will 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.

Item 4 in the table in clause 1 of Schedule 1 to the GST Act (item 4) lists food marketed as a prepared meal, but not including soup.

Rice balls are generally eaten as a part of, or an accompaniment to, a meal and are not marketed as prepared meals. Therefore, the rice ball product will not be covered by item 4.

There are no other items in the table in clause 1 of Schedule 1 to the GST Act that the rice ball product is covered by.

The rice ball product is not a combination of foods at least one of which is food of a kind listed in the third column of the table in clause 1 of Schedule 1 to the GST Act.

Therefore, the exclusion at paragraph 38-3(1)(c) of the GST Act does not apply to the rice ball product.

There are no other exclusions in section 38-3 of the GST Act that apply to the rice ball product.

Therefore, your sales of the rice ball product will be GST-free supplies under section 38-2 of the GST Act. Hence, your sales of this product will not be taxable supplies, and therefore, GST will not be payable on your sales of this product.

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