Disclaimer
This edited version has been archived due to the length of time since original publication.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.

Edited version of your written advice

Authorisation Number: 1012896635631

Date of advice: 16 October 2015

Ruling

Subject: Goods and services tax (GST) and food

Question 1

Is GST payable on your sale of (brand name) Dairy Desserts?

Answer

No.

Question 2

Is GST payable on the importation of (brand name) Dairy Desserts?

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You import into Australia and sell (brand name) Dairy Desserts. The product is marketed in Australia in various flavours.

You currently sell the product to a supermarket chain operating in Australia, on a DDP basis.

Each product comes in an adjoining pack of (number) x (number) gram plastic containers.

The packaging of the products states 'Dairy Dessert'.

The products are refrigerated dessert products. They must be stored below (a very cold temperature) but not frozen.

The products are positioned in the supermarket near the custard products.

The products constitute principally of dairy products. The very large majority of each product is milk and cream

Each product also contains sugar, thickeners and flavours.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

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

Reasons for decisions

Question 1

Summary

Your sales of the products are GST-free sales of food under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

GST is payable on your taxable supplies.

You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:

You make a taxable supply if:

(*Denotes a term defined in the GST Act)

The indirect tax zone is Australia.

You meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:

There are no provisions of the GST Act under which your sales of the products would be input taxed.

Therefore, what remains to be determined is whether your sales of the products are GST-free.

GST-free supplies of food

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, amongst other things, food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The products considered in this ruling are food for human consumption and therefore, satisfy the definition of food in the GST Act.

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 that is specified in the third column of 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.

The Detailed Food List on the Australian Taxation Office website classifies the sale of dairy desserts as GST-free.

The products in question are not covered by any of the items in Schedule 1 to the GST Act and the products are not food that is a combination of one or more foods at least one of which is food of such a kind.

Therefore, the exclusion at paragraph 38-3(1)(c) of the GST Act does not apply.

None of the exclusions in subsection 38-3(1) of the GST Act apply. Therefore, your sales of the products in question are GST-free under section 38-2 of the GST Act. Hence, GST is not payable on your sales of the products.

Question 2

GST is payable on taxable importations.

Subsection 13-5(1) of the GST Act states:

You make a taxable importation if:

Section 13-10 of the GST Act states:

An importation is a non-taxable importation if:

Your sales of the products in question are GST-free. Therefore, your importation of these products are non-taxable importations under paragraph 13-10(b) of the GST Act.

Hence, GST is not payable on your importation of the products.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).