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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

· You contend that the product would primarily be bought for the activity of decorating, not just for eating.

In respect to a mixed supply, the consideration received for the supply must be apportioned, and GST levied only on the consideration relating to the taxable part of the supply.

You have indicated that the writing icing tubes have previously been supplied in a pack for $x and you intend to supply the product containing the food item and the writing icing tubes for $x which places a value of the taxable food item at $x. As the goods items can be identified you can readily calculate the value of those supplies that are taxable.

The basis for apportionment needs to be calculated on a reasonable basis and records must be kept that explain the method of apportionment used.

For further information on apportionment of mixed supplies and composite supplies please refer Goods and Services Tax Ruling GSTR 2001/8, which explains how to apportion the consideration for a supply that includes taxable and non-taxable parts and also when apportionment is not required.

A copy of GSTR 2001/8 is available on our website ato.gov.au.


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