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Edited version of your private ruling
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Ruling
Subject: GST and various food products
Question:
Will your supply of the food products be GST-free?
Answer:
Yes.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You are to manufacture and sell food products.
The food products will be sold frozen to your customers.
None of the food products have any filling.
None of the food products are iced or have any other type of sweet coating.
Your customers will on-sell the food products as food for human consumption.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999
Section 38-2
Section 38-3
Section 38-4.
Reasons for decision
A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in section 38-4 of the GST Act and it is not excluded 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)) and ingredients for food for human consumption (paragraph 38-4(1)(d)).
In your case, you are to sell the food products to your customers who will then on-sell as food for human consumption. Consequently, your food products satisfy the definition of food for GST purposes because they will be sold as food for human consumption. The food products do not fall within any of the exclusions in section 38-3 of the GST Act except they may possibly be captured by paragraph 38-3(1)(c). 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 (Schedule 1). Clause 2 of Schedule 1 further provides that it does not matter whether the food products in Schedule 1 are supplied hot or cold or require cooking, heating, thawing or chilling prior to consumption.
Detailed food list
Before having regard to Schedule 1, it is worth referring to the Detailed food list (a public ruling for GST purposes) as it classifies for GST the supply of certain foods. Listed in the Detailed food list are GST-free food products very similar if not identical to your food products.
The Detailed food list requires that these similar food products be unfilled. Your food products have no identifiable filling but do contain certain food items. However, we consider that these certain food items when mixed into the dough before cooking can be treated as ingredients and not as a filling. This would also be true for other ingredients incorporated into the dough before cooking such as cheese or chocolate chips. Hence, your food products are unfilled (the certain food items being mixed into the dough as ingredients before cooking).
Also, your food products do not have a sweet coating. Some of your food products do have a topping but they are captured by the Detailed food list GST-free products. Given this, your supply of the food products will be GST-free in accordance with the Detailed food list provided they are not excluded from being GST-free because they can also be classified as a food of a kind to those foods listed in Schedule 1.
Schedule 1 - Bakery products
Schedule 1 includes the following food category that may be of relevance when considering the GST treatment of your supply of food products:
Bakery products, in particular Item 27 of this category that includes bread (including buns) with a sweet filling or coating.
Note that there are no other foods listed in Schedule 1 that would be relevant to your food products.
As determined, your food products are unfilled and have no sweet coating so are not captured by this food category. Consequently, your food products will not be excluded from being GST-free under section 38-3 of the GST Act and hence, will be GST-free under section 38-2 of the GST Act.
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