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Edited version of your written advice
Authorisation Number: 1012764150623
Ruling
Subject: Salty fruit product and GST
Question 1
Is the importation of a salty fruit product a taxable importation?
Answer
No.
Relevant facts and circumstances
• You are not registered (or required to be registered) for GST.
• You import and enter for home consumption a salty fruit product (fruit product).
• Your supplier is located overseas. They preserve the fruit product with salt for 2-3 months and the fruit products are then sun-dried in their glass room.
• The fruit products are not crystallized and do not contain any sweet coating or topping (eg no toffee or chocolate) or glace.
• The fruit products are not marketed as confectionery items.
• The packaging of the fruit products does not promote confectionery but contain a clear packaging that shows the product.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999, section 13-5
A New Tax System (Goods and Services Tax) Act 1999, section 13-10
A New Tax System (Goods and Services Tax) Act 1999, section 38-2
A New Tax System (Goods and Services Tax) Act 1999, section 38-3
A New Tax System (Goods and Services Tax) Act 1999, section 38-4
A New Tax System (Goods and Services Tax) Act 1999, schedule 1
Reasons for decision
Section 7-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that GST is payable on taxable importations.
Section 13-5 of the GST Act provides that you make a taxable importation if goods are imported and the goods are entered for home consumption. However, the importation is not a taxable importation to the extent that it is a non-taxable importation. Paragraph 13-10(b) of the GST Act provides that an importation is a non-taxable importation if it would have been a supply that was GST-free.
A supply of food is GST-free under section 38-2 of the GST Act if the product satisfies the definition of food in section 38-4 of the GST Act and the supply is not excluded from being GST-free by section 38-3 of the GST Act.
Definition of Food
Food is defined in section 38-4 of the GST Act to include food for human consumption (whether or not requiring processing or treatment). In your case, the fruit product can fall under the definition of food given in section 38-4 of the GST Act as food for human consumption.
However, 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).
• Items subject to GST under Schedule 1 of the GST Act that may be relevant in this case are:
• Item 8 confectionery, food marketed as confectionery, or food consisting principally of confectionary
• Item 16 seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way
Item 18 Food similar to that covered by item 15 or 16, whether or not it consists wholly or partly of any vegetable, herb, fruit, meat, seafood or diary product or extract and whether or not it is artificially flavoured.
Preserved Fruit Product
Your salty food product is a dried preserved fruit that is not confectionery. It is not marketed as confectionery and does not fall within the description "food consisting principally of confectionery" in item 8 of clause 1 in schedule 1 to the GST Act. The predominant ingredient in this product is the dried fruit. Therefore item 8 does not apply.
Salty fruit products do not fall under the category of savoury snacks, in particular item 16 or item 18. Savoury snacks are more akin to products that can be consumed in large quantities, whereas salty fruit products could not because of the very strong flavour. This product is simply a preserved fruit.
Therefore the fruit product is food for human consumption and is not listed in Schedule 1 to the GST Act. The fruit product is considered to be GST-free.
The importation of the salty fruit product is a non-taxable importation in accordance with section 13-10 of the GST Act.
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