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Ruling

Subject: GST and fruit products

Question

Is your supply of the fruit product (Product) GST-free?

Answer

No. Your supply of the Product is taxable.

Relevant facts and circumstances

You are registered for GST.

You sell the Product.

The Product comprises bite size pieces of fruit sold in a container.

The container can be used as a serving dish.

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 A New Tax System (Goods and Services Tax) Act 1999 (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 sell the Product. The Product satisfies the definition of food because it is sold as food for human consumption. The Product does not fall within any of the exclusions in section 38-3 of the GST Act except it 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).

Schedule 1 includes the following food items that may be of relevance when considering the GST treatment of your supply of the Product:

Platters etc. of cheese, cold cuts, fruit or vegetables and other arrangements of food (Item 5 of Schedule 1).

The ATO's view on what constitutes a platter for GST purposes is provided by Issue 5 of the Food Issues Register (Issue 5). The Food Issues Register is available from the ATO website www.ato.gov.au. Issue 5 states (with reference to the Macquarie dictionary) that a platter is:

… a large shallow dish, commonly oval, for holding or serving meat etc

Issue 5 also states that:

· Item 5 of Schedule 1 is referring to platters and arrangements of food that can be uncovered and placed on the table ready for serving (for example, as a catering product at parties, BBQs and so forth)

The important principle from Issue 5 is that the food is served in a dish and is ready to be consumed, that is, no preparation is required other than the food being uncovered.

In your case, the fruit comes in bite size pieces that can be consumed without preparation.

The container is plastic and is used to store the fruit prior to its sale. However, the shape of the container and the positioning of the fruit give the container the appearance of a serving dish. In addition, the fruit can be served and consumed straight from the container once it has been uncovered. Hence, although the container is used to package the fruit prior to its sale, it can also be used as a serving dish for the fruit.

Given this, your Product can be considered to be a fruit platter as defined in Issue 5 and consequently, its supply is taxable.

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