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Edited version of your private ruling
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Ruling
Subject: GST and food
Question
Is your supply of the fruit product (Product) GST-free?
Answer
Yes.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You sell the Product.
The Product comprises of cut slices of a single type of fruit placed on a specific container. The fruit is sealed using clear plastic wrapping.
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 item 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).
Note that there are no other food items in Schedule 1 that are relevant to the Product.
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).
In this case, there are slices of fruit that can be unwrapped, placed on a table and eaten without further preparation. Nevertheless, there are differences between this Product and a fruit platter as described in Issue 5.
The Product cannot be considered an arrangement of food given there is only one fruit being offered. Also, the fruit comes in a specific container that is widely used by retailers to store and sell many other types of foods. This container could not be categorised as a type of dish used for presenting food platters.
The example given in Issue 5 illustrates these differences using sundried tomatoes (a food that has been prepared to enable immediate consumption once taken from its container):
David's Gourmet Foods supplies trays of gourmet food to customers for use at parties and other functions. One of these trays consists of an arrangement of antipasto products including, meats, sundried tomatoes, pickled vegetables, bread sticks and other items chosen by the customer. This product is considered to be a platter and subject to GST.
However, each of these items can also be sold individually. For example, the sundried tomatoes are also sold in separate plastic containers with a lid. The supply of the products in this way is not considered to fall within Item 5 of the GST Act.
Given this example, the Product should not be considered a fruit platter but simply as a fruit that is being sold in a specific container. As such its supply would be GST-free under section 38-2 of the GST Act.
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