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Authorisation Number: 1011816942201

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Ruling

Subject: Supply of tradition Indian packaged foods

Question

Is the supply of the traditional Indian packaged food products as specified below a GST-free supply pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

Answer: Yes.

All the listed products are GST-free

Relevant facts and circumstances

The entity is registered for GST.

The entity sells traditional Indian meals and meal products.

The products apart from the basmati rice covered by this ruling do not include rice or any other meal components.

Although the products are already prepared, they typically come in larger sizes that have been designed to share with others and to eat with other dishes such as basmati rice, chutney and raita.

You advise that an Indian curry is not a meal on its own. Rather it is part of a meal. In this regard, it is usual to eat Indian meals where a couple of main courses are served along with different pickles, chutneys and of course different types of Indian bread and rice.

There are a number of curries that are covered by this ruling which are referred to collectively as the curry products.

The other products covered by this ruling are referred to collectively as the other products.

You have provided samples of the containers. The label refers to the need for refrigeration and that the curries are ready to heat & serve. The label also says to try with rice and naan bread.

You also manufacture and sell a range of ready to eat complete meals which consist of curry and rice. You treat these as the taxable supply of prepared meals.

Reasons for decision

Question

Section 38-2 of the GST Act states:

A supply of *food is GST-free.

(* denotes a term defined in section 195-1 of the GST Act)

'Food' is defined in section 38-4 of the GST Act to include 'food for human consumption (whether or not requiring processing or treatment)'. In your case, the products are food for human consumption and therefore, satisfy the definition of food in section 38-4 of the GST Act.

However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free under section 38-2 of the GST Act if it is 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 (Schedule 1), or food that is a combination of one or more foods at least one of which is food of such a kind.

Item 4 in clause 1 of Schedule 1 (Item 4) states:

*food marketed as a prepared meal, but not including soup

The Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 (EM) provides that the term 'prepared meal' is intended to cover a range of food products that:

· directly compete against takeaways and restaurants

· require refrigeration or freezing for storage and

· are marketed as a prepared meal.

Paragraph 1.33 of the EM provides examples of prepared meals which include:

Prepared meals, such as curry and rice dishes, mornay's and similar dishes sold cold by a take-away or supermarket that only need reheating to be ready for consumption.

If the food product directly competes with takeaways and restaurants, it is considered to be a prepared meal.

In deciding whether a food product directly competes with takeaways and restaurants, it is necessary to consider whether that product is usually supplied by takeaways or restaurants with accompaniments. Curries are considered to be usually served with rice or another accompaniment.

A prepared meal is something that is capable of being a meal in itself. In your case, the curry products are marketed as a constituent part of meals, and would usually be eaten with the addition of steamed rice, and Indian bread to complete the meal. The curry products are not assembled and ready to eat as with your ready to eat prepared meals. These products do not come with the rice or any other condiments and are in the same position as pasta sauce without pasta. Therefore your curry products are not prepared meals.

The Detailed food list available on our website www.ato.gov.au shows:

The other products are listed in the GST-food list as GST-free. The Naan breads by the first item in the table above. The samosas and onion bhaji covered by the second item. The raitas by the third and fourth items and the rice by the last item in the table therefore these items are all GST-free.

The range of products (both the curry products and other products) in this case are not exclusions covered by any other items in Schedule 1 nor do they contain any foods that are covered by any items in Schedule 1. Accordingly, the supplies of the products are not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act.

Furthermore, the supply of the products does not fall within any of the other exclusions in section 38-3 of the GST Act. Accordingly, the supply of these products is GST-free.

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