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Edited version of private ruling

Authorisation Number: 1011833348987

Ruling

Subject: GST and importation of food

Question

Is your importation of certain food products taxable?

Answer: No.

Relevant facts and circumstances

You are registered for GST.

You import food products to supply in Australia.

Two of the products you import (Product A and B) are frozen and need to be cooked before eating.

Product A has ingredients similar to bread / bun dough and has a particular filling.

Product A is not coated.

Product B is a flavouring that can be used on any food item but is often used with Product A.

Product B has not been designed specifically to flavour beverages.

Both products are sold separately.

Australian Customs has treated your importations of these two products as taxable.

Reasons for decision

Summary

Your importation of the products is non-taxable as the supply of these products in Australia would be GST-free as food.

Detailed reasoning

Section 13-15 of the GST Act provides that you must pay the GST payable on any taxable importation that you make.

Section 13-5 of the GST Act further provides that you make a taxable importation if:

However, section 13-10 of the GST Act does provide that an importation can be treated as non-taxable if:

In your case, you have imported the products to supply in Australia, an activity that is considered to be for home consumption and which Australian Customs has treated as taxable.

In deciding whether your importation should have been treated as non-taxable, it is only necessary to met one of the two dot points in section 13-10 of the GST Act. Given Part 3-2 of the GST Act concerns itself specifically with the Customs Tariff Act 1995, the provisions of which I cannot upon, it would be more appropriate to consider the second dot point first to determine the GST treatment of your importation.

A supply of food is GST-free

There are no sections of the GST Act or any other Act that would make your supply (in Australia) of the imported products input taxed. However, the GST Act does allow a supply of food to be GST-free provided it does not come within any of the exclusions listed in the GST Act.

Definition of food

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 the section 38-3 of the GST Act.

Subsection 38-4(1) of the GST Act defines food for the purposes of section 38-2 of the GST Act. Of most relevance to your circumstances is paragraph 38-4(1)(a) which defines food as including food for human consumption (whether or not requiring processing or treatment) and paragraph 38-4(1)(e) which defines food as including goods to be mixed with or added to food for human consumption (including sweetening agents or flavourings).

Product A

Product A, although they requiring cooking, is food for human consumption under paragraph 38-4(1)(a) of the GST Act.

Section 38-3 of the GST Act (with reference to Schedule 1 of the GST Act) does exclude certain categories of products such as bread (including buns) with a sweet filling or coating. However, in this case we do not consider that the filling in Product A is a sweet filling and Product A is also not coated. Further, we consider that the addition of the filling has not changed the character of this product from being similar to a plain bread or bun type dough to a sweet bakery product.

We also do not consider that Product A is a prepared meal, a food product also excluded from being GST-free under section 38-3 of the GST-Act.

Product B

Product B is a product that is to be mixed with food, in this case Product A, to give the food flavour. It has not been specifically designed to flavour beverages, a food product that would be excluded from being GST-free under section 38-3 of the GST Act.

Hence, Product B satisfies paragraph 38-4(1)(e) of the GST Act as a flavouring and is not excluded from being GST-free under any of the categories provided by section 38-3 of the GST Act.

Consequently, as the supply in Australia of Product A and B as separate products would be GST-free, the importation of these products should be non-taxable under 13-10 of the GST Act.

Incorrectly paid GST

Australian Customs has treated the importation as taxable for which you have paid GST.

If you have not claimed this GST on your activity statements then you would need to seek a refund of the GST paid from Australian Customs.

If you have claimed this GST then you can either:

not seek a refund from Australian Customs (keeping the GST that you have claimed), or

first make a refund to the ATO of the GST claimed then seek a refund from Australian Customs.

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