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Edited version of your written advice

Authorisation Number: 1051195346554

Date of Advice: 27 February 2017

Ruling

Subject: GST

Question

Is the supply of the Product GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

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.

The supply of the Product is GST-free under section 38-2 of the GST Act because:

The Product is an ingredient for food for human consumption for the purposes of the GST Act and therefore, satisfies the definition of food under paragraph 38-4(1)(b) of the GST Act.

The Product is not food of a kind specified for the purposes of paragraph 38-3(1)(e) of the GST Act as it is an exempt food additive under paragraph 38-3.02(2)(b) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) because:

The Product is classified as a food grade product and contains ingredients having measurable nutritional value

The Product is supplied for use solely in the composition of food, and

For the purposes of the GST Regulations, it is accepted that the Product is essential for the composition of foods as it is manufactured specifically for use in foods.

Further, the supply of the Product does not fall within any of the other exclusions in section 38-3 of the GST Act.

Relevant facts and circumstances

You import the Product.

The Product is supplied for use solely in the composition of food. The Product is manufactured specifically for use in foods and has no application outside the food industry.

The Product complies with the Australian New Zealand Food Standard Code.

You provided a copy a specified document which states that the Product is food supplied as an ingredient for use in further manufacturing or processing of food.

You provided a copy of a specified document which lists the description, specification, physical chemical properties and registration of the Product.

You provided a copy of a specified document which shows that the Product contains ingredients that have a measurable nutritional value.

Relevant legislative provisions

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 Subsection 38-3(1).

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-3(1)(e).

A New Tax System (Goods and Services Tax) Act 1999 Section 38-4.

A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(b).

A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 38-3.02.

A New Tax System (Goods and Services Tax) Regulations 1999 Subregulation 38-3.02(1).

A New Tax System (Goods and Services Tax) Regulations 1999 Subregulation 38-3.02(2).

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The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.

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