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Edited version of private advice
Authorisation Number: 1051645872016
Date of advice: 25 March 2020
Ruling
Subject: GST and food
Question
Is your supply of flavourings, spices and condiments mixture GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes, your supply of flavourings, spices and condiments mixture is GST-free under section 38-2 of the GST Act.
Relevant facts and circumstances
You are carrying on business and is registered for GST.
You have a product made up of a mixture of flavourings, spices and other condiments for human consumption.
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 it satisfies the definition of food in section 38-4 of the GST Act and it is not excluded by section 38-3 of the GST Act.
The definition of food in section 38-4 of the GST Act includes goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings) under paragraph 38-4(1)(e) of the GST Act.
The document Food Industry Partnership - issues register lists major issues and subsidiary questions, which have been collated as a result of consultations with the Food sector. In particular, issue 11 states (in part):
Those products included in paragraph 38-4(1)(e) of the GST Act include:
· condiments (for example, tomato sauce, jam, chutney)
· spices (for example, pepper, cinnamon, cloves)
· seasonings
· sweetening agents
· flavourings (for example, vanilla essence).
Products that satisfy paragraph 38-4(1)(e) are used for the purpose of adding to the taste or flavour of finished foods.
Your product has the essential character of the class of goods listed above. Hence, they satisfy the definition of food in paragraph 38-4(1)(e) of the GST Act.
However, 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Your product is not food of a kind specified in Schedule 1.
In addition, they do not fall within any of the other exclusions in section 38-3 of the GST Act.
Therefore, the supply of your product is GST-free under section 38-2 of the GST Act.
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