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Edited version of your written advice

Authorisation Number: 1012818910271

Date of advice: 19 June 2015

Ruling

Subject: Frozen product

Question

Is the supply of the frozen product GST free?

Advice

No

Relevant facts and circumstances

• You are registered for goods and services tax (GST).

• You supply the frozen product.

• The frozen product is made of milk product and it contains milk fat.

• The frozen product is stored in a freezer.

• The frozen product is ready for consumption as frozen food product.

Reasons for decision

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.

Food is defined in section 38-4 of the GST Act to include food for human consumption (whether or not requiring processing or treatment) -paragraph 38-4(1)(a) of the GST Act. The frozen product is a frozen dessert food and it satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act.

However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free if it is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1), or food that is a combination of one or more foods at least one of which is food of such a kind specified in Schedule 1.

The frozen product is made of milk products. It is stored in a freezer and it is ready for consumption as a frozen dessert food.

Based on the above information, we consider that the frozen product could be an ice cream product or ice cream substitutes listed in item 28 in Schedule 1 (item 28).

The meaning of ice cream or ice cream substitute are not defined in the GST legislation and therefore must be construed according to their ordinary meaning. The meaning of ice cream in the Macquarie Dictionary (Dictionary) is as follows:

The term "ice cream substitute" is not defined in the Dictionary. However, the word "substitute" is defined in the Dictionary as:

Therefore an ice cream substitute can be served (in place of) an ice cream food. The ice cream substitute will display all the characteristics of an ice cream food, such as being a frozen food product and is made of cream, rich milk, or evaporated milk. The food may be sweetened and flavoured.

Based on the information provided, we consider the frozen product is an ice cream substitute. The frozen product is made from milk products and it contains milk fat. The frozen product is ready for consumption as frozen dessert food. It is stored in a freezer.

The frozen product is an ice cream substitute and is listed in item 28. It therefore is excluded from being GST-free under paragraph 38-3(1)(c) of the GST Act. The supply of the frozen product is not a GST-free food under section 38-2 of the GST Act.

As the frozen product is not GST-free food, we do not have to consider whether the frozen product is a frozen confectionery listed in item 29 of Schedule 1 or foods listed in item 31 of Schedule 1 (that is: any food similar food listed in items 28 to 30 of Schedule 1).

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