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Edited version of private advice
Authorisation Number: 1051700552737
Date of advice: 22 June 2020
Ruling
Subject: GST and supply of food
Question 1
Is the supply of the Products GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
The supply of the Products is GST-free under section 38-2 of the GST Act because:
- the Products are supplied as food for human consumption and hence, satisfy the definition of food in paragraph 38-4(1)(a) of the GST Act, and
- the supply of the Products does not fall within any exclusions in section 38-3 of the GST Act.
Question 2
Is the importation of the Products a non-taxable importation under paragraph 13-10(b) of the GST Act?
Answer
Yes. The importation of the Products is a non-taxable importation under paragraph 13-10(b) of the GST Act because, as outlined in Question 1, had it been a supply, it would have been GST-free.
Relevant facts and circumstances
You sell a range of superfood powders.
You recently purchased the business and are not currently registered for GST as your GST turnover is less than $75,000. However, you intend to be registered from the next tax period.
You promote the Products through your website and social media accounts and sell the Products through your website.
Your website contains the following information:
· The superfood powders contain only natural ingredients.
· The superfood powders can be mixed to smoothie, milk or juices, stirred into your yogurt, colour your food and used in baked goods.
The Products are all mild in flavour and so are used as a natural colourant both in food and drinks.
You provided pictures of the packaging of the Products which state how they are marketed and used. The packaging for the Products state that they are rich in nutrients. The packaging for a number of the Products show that these powders can be mixed into food, used in baking or consumed by adding to a beverage. The packaging for a number of the Products indicate they are food grade and apart from adding them to a drink, they also have alternative non-food uses.
The Products are imported into Australia.
You provided images showing how the Products are packed when imported. They are packed in large wholesale bags containing smaller individual clear plastic bags, which will be packaged here in Australia.
Your website includes various recipes using the superfood powders.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 13-5.
A New Tax System (Goods and Services Tax) Act 1999 Paragraph 13-10(b).
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.
A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-4(1)(a).
A New Tax System (Goods and Services Tax) Act 1999 Schedule 1 clause 1.
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