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Edited version of private advice
Authorisation Number: 1051966021664
Date of advice: 28 March 2022
Ruling
Subject: Importation of product
Question
Is the importation of the Product into Australia by you a non-taxable importation pursuant to section 13-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer:
Yes, the importation of the Product is a non-taxable importation because it would have been a supply that was GST-free if it had been a supply.
The supply of the Product would be GST-free under section 38-2 of the GST Act because:
- the Product is an ingredient for beverages for human consumption and satisfy the definition of food in paragraph 38-4(1)(d) of the GST Act, and
- The Product is marketed similarly to tea or coffee preparations; that is, it is marketed principally as a substitute for tea or coffee preparations. Hence the Product is GST-free pursuant to item 8 in the table in clause 1 of Schedule 2 to the GST Act.
Consequently, your importation of the Product is non-taxable under section 13-10 of the GST Act and therefore would not be subject to GST. Please refer to the following information in the Detailed Food List on our website:
• Questions | GST food and beverage search (ato.gov.au)
Chocolate drinking preparation - dry, marketed to create a hot chocolate drink
GST-free
Schedule 2, item 8 of the GST Act applies. Hot chocolate is considered a substitute for tea, coffee and malted beverages (refer ATO ID 2008/144)
Relevant facts and circumstances
You import the Product into Australia to sell.
It is raw cacao paste and you sell it to be used as a drinking chocolate for your customers.
The manufacturer is from overseas. They also market the Product for health and spiritual benefits. They grow the cacao beans, harvest them and grind them into paste. The Product is then sold and marketed for consumers to add water or milk to it and drink it.
The raw "cacao paste" is also known as "chocolate liquor" or "cocoa solids". It is ground cacao beans pressed into a block to solidify. It is 100% cacao beans. The Product is marketed on your website as follows....
You sent photos of the Products as they arrived in Australia, and of the Product's labelling and packaging.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 13-10.
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.
A New Tax System (Goods and Services Tax) Act 1999
Schedule 2 clause 1 table item 6
Schedule 2 clause 1 table item 7
Schedule 2 clause 1 table item 8
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