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Edited version of private advice
Authorisation Number: 1012628723655
Ruling
Subject: GST and food
Question
Should the supply of a product (Product) to you been taxable for goods and services tax (GST) purposes?
Answer
No. The supply of the Product to you should have been GST-free as food for human consumption.
Relevant facts and circumstances
• You are registered for GST.
• You purchased a particular product (Product) which you are to sell as food.
• The supplier of the Product is registered for GST.
• The supplier sold the Product to you as food for human consumption and treated the supply as taxable.
• The Product needs to be cooked before consumption.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999
Section 38-2
Section 38-3.
Reasons for decision
A supply of food for human consumption is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) (whether or not the food requires further processing or treatment). However, the food must not be cereal or grain that has not been subject to any process or treatment resulting in an alteration of its form nature or condition or be excluded by section 38-3 of the GST Act.
In this case, the Product was sold to you as food for human consumption. Also, the Product had undergone a process and is not excluded as food for GST purposes under section 38-3 of the GST Act.
Note that a supplier may sell the same product for different purposes. For example, a cereal or grain type product could possibly be sold as seed, animal feed or similar. However, as the supply to you was a sale of food for human consumption, it should be treated as such for GST purposes.
Given this, your purchase of the Product should have been a GST-free supply of food under section 38-2 of the GST Act where the supplier is registered for GST.
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