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Edited version of your written advice

Authorisation Number: 1051305724566

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Date of advice: 15 November 2017

Ruling

Subject: GST and food

Question

Are the supplies of your packaged salad products GST-free?

Answer

Yes, the supplies of your packaged salad products are GST-free.

Relevant facts and circumstances

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 paragraph 38-3(1)(c)

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

Reasons for decision

A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if it satisfies the definition of food in section 38-4 of the GST Act, and it does not come within any of the exclusions in section 38-3 of the GST Act.

The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment).

The packaged salads are food for human consumption and therefore fall within the meaning of food in section 38-4 of the GST Act.

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). Of specific relevance is item 4 of Schedule 1 (Item 4), which provides that food marketed as a prepared meal (but not including soup) is not GST-free.

Therefore, the classification of the salad products depends on whether they are considered to constitute a 'prepared meal'.

A prepared meal is intended to cover a range of food products of a kind that meet all three conditions below:

Salads, including pasta, rice, coleslaw, meat, seafood, or green salad, sold from salad bars at supermarkets in either the delicatessen section or from a self-serve bar, are GST-free provided they are not marketed as a prepared meal.

In determining whether food is marketed as a 'prepared meal' the activities of the seller are relevant. Consideration is given to the following:

In this case, on the information provided, the salad products will not be marketed as a prepared meal.

Therefore, the salad products are not covered by Item 4. Furthermore, the salad products are not covered by any other item in Schedule 1, nor do they come within any of the other exclusions listed in section 38-3 of the GST Act.

Accordingly, you will be making GST-free supplies under section 38-2 of the GST Act when you sell the packaged salads.

Additional Information:

Please be advised that if the promotional mix or packaging information changes from what has been advised and/or the salad products are marketed as a prepared meal, the GST status of the product may change from GST-free to taxable.


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