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Edited version of your written advice

Authorisation Number: 1012808249936

Ruling

Subject: Food ingredients

Question

Is the supply of products for food manufacturing GST-free?

Advice

Yes

Relevant facts and circumstances

Reasons for decision

A supply of a product is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (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.

Food is defined in section 38-4 of the GST Act to include:

The products are added to treat the foods during manufacturing. The supplier confirms that the products are fit for human consumption. The products are therefore food ingredients that are added to foods during manufacturing. The products satisfy the meaning of food under paragraph 38-4(1)(b) of the GST Act.

Section 38-3 of the GST Act

Next we have to consider whether the supply of the products is excluded from being GST-free by section 38-3 of the GST Act. Paragraph 38-3(1)(c) of the GST Act provides that foods specified in the third column of the table in clause 1 of Schedule 1 of the GST Act (Schedule 1) are excluded from being GST-free..

In this case, we consider that the products are added as food ingredients during food manufacturing. The products are not food listed in Schedule 1. Therefore, the supply of the products as food ingredients are not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. The supply of the products is GST-free under section 38-2 of the GST Act.

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