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Ruling

Subject: GST-free supplies of food

GST-free supply of food

Question 1

Will supplies of a beverage containing 99.9% particular fruit juice, be GST-free under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Yes.

Relevant facts

Reasons for decision

Issue 1

Question 1

Supplies of the product will be GST-free under the GST Act.

In accordance with section 9-30 of the GST Act a supply is GST-free if it is GST-free under Division 38 or under a provision of another Act.

Division 38 of the GST Act provides that a supply of food is GST-free (section 38-2). Food includes beverages for human consumption (section 38-4). A beverage means a drink of any kind (GSTD 2002/2).

However, a supply is not GST-free under section 38-2 of the GST Act if it is a supply of a beverage (or ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2.

Therefore to be GST-free, a beverage needs to fit within the descriptions in the table in clause 1 of Schedule 2. This table considers fruit and vegetable juices, and at item 12 it provides that non-alcoholic, non-carbonated beverages that consist of at least 90% by volume of juices of fruits or vegetables are GST-free.

As your product is a non-alcoholic, non-carbonated juice that is at least 90% by volume of fruit juice, it is GST-free.

An appropriate GST exemption code may be used to facilitate the importation (AB12). Subsequent sales of the unaltered beverage will be GST free.

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