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Edited version of your written advice

Authorisation Number: 1051309915423

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Date of advice: 27 November 2017

Ruling

Subject: GST and food

Question

What is the GST status of fruit salad, vegetable salad and bottled still water when sold for consumption to both dine-in and away from the premises?

Answer

You seek advice on the goods and services tax (GST) status of takeaway fruit salad, vegetable salad and bottled water for consumption on the premises and away from the premises.

Relevant facts and circumstances

You seek advice on the goods and services tax (GST) status of takeaway fruit salad, vegetable salad and bottled water for consumption on the premises and away from the premises.

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

Section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that a supply of food is GST-free.

Therefore, a supply of food that would otherwise be GST-free, such as bottled water or fruit and vegetable salad, becomes a taxable supply by virtue of paragraph 38-3(1)(a) of the GST Act if it is for consumption on the premises from which it is supplied.

Section 38-5 of the GST Act defines 'premises':

Paragraph 5 of Goods & Services Tax Determination GSTD 2000/4 explains:

When considering the possible application of paragraph 38-3(1)(a) of the GST Act to supplies of food made from the store, the store itself and any associated surrounding area connected with the outlet are the relevant premises, as indicated in paragraph 5 of GSTD 2000/4.

You have advised that there are no tables or chairs in the store itself, although there are tables and chairs located near the store. Considering their proximity to the store, it is reasonable to conclude that the tables and chairs are in an associated surrounding area connected with the store. By virtue of paragraph 38-5(b) of the GST Act, the area where the tables and chairs are located will form part of the premises of the store.

Goods & Services Tax Determination GSTD 2000/5 provides guidance on how to determine whether a supply of food is for consumption on the premises from which it is supplied. As you advise that the store personnel are not aware of where the customer will consume the food, paragraph 4 of GSTD 2000/5 is relevant:

The following examples in GSTD 2000/4 are relevant, as the situation of a snack bar in a food court is considered to be comparable with the situation of a store in a resort complex:

On the facts that you provided, the situation in example 2 in GSTD 2000/4 is comparable with the manner in which supplies of food are made from your store in the complex.

Accordingly, a GST-free supply such as fruit salad, vegetable salad and bottled water remains GST-free if it is not supplied for consumption on the premises.

Provided that:

The supply of the fruit salad, vegetable salad and bottled water sold in takeaway containers will be GST-free. Food supplied for consumption on the premises will be subject to GST.


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