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Edited version of your written advice

Authorisation Number: 1051309518508

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Date of advice: 27 November 2017

Ruling

Subject: GST and food

Question

Is GST payable on your supply of your food products?

Answer

GST is payable on the supply of some of your food products.

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 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 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 definition of food in section 38-4 of the GST Act includes food for human consumption, whether or not requiring processing or treatment. Your products are sold in a retail outlet as food for human consumption and consequently, can be treated as food for human consumption.

When the supply of food is taxable

You operate your enterprise within a food court.

Paragraph 38-3(1)(a) of the GST Act will exclude a supply of food from being GST-free if the food is consumed on the premises from where it is supplied. The ATO view on what constitutes premises is give by goods and service tax determination GSTD 2000/4 (available from the ATO website www.ato.gov.au). This determination includes food courts as premises from where food can be supplied.

Another exclusion is provided by paragraph 38-3(1)(b) of the GST Act. This provision excludes the supply of food from being GST-free if it is served hot and consumed away from the premises where it is supplied.

Note that any food served hot will be captured by one of the above two legislative paragraphs and hence will always be taxable.

The third and final exclusion that is of relevance to your sale of the food products is paragraph

38-3(1)(c) of the GST Act. This provision 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) or is a food that is a combination of one or more foods at least one of which is food of such a kind.

Schedule 1 includes the following food item that may be of relevance when considering the GST treatment of your food products:

It is therefore necessary to determine if your products are captured by any of these exclusions.

When is food consumed on the premises

In the situation where it is difficult to determine where food will be consumed, we can refer to goods and services tax determination GSTD 2000/5 (also available from the ATO website) which provides the ATO view on where consumption takes place.

Paragraph 4 of GSTD 2000/5 states the following:

What is a prepared meal

The ATO view on prepared meals is provided by Issue 5 of the Food Issues Register (Issue 5 – also available from the ATO website). Issue 5 provides that the term prepared meal is intended to cover a range of food products that:

Issue 5 further provides some examples of prepared meals and includes:

Issue 5 also explains that for food to be considered as a prepared meal, the food needs to be supplied assembled and dressed (if applicable). In addition, if the food is cooked or partly cooked and is to be served hot, it should only need heating, which may include completion of the cooking process, to be ready for consumption. Heating will be interpreted to mean warmed in the microwave oven, convection oven, frying pan, wok or saucepan.

Classification of your food products


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