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Edited version of private ruling
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Ruling
Subject: GST and cookie dough
Question
Is the supply of cookie dough that is sold in tubular form and requiring slicing before consumption GST- free?
Answer
No, the supply of cookie dough that is sold in tubular form and requiring slicing before consumption is not GST-free. It is a taxable supply where the provisions of section 9-5 of A New Tax system (Goods and Services Tax) Act 1999 (GST Act) are satisfied.
Relevant facts and circumstances
You are an entity and you are registered for the goods and services tax (GST).
You supply a range of cookie dough.
The product is mixed dough contained within a cylindrical plastic tube.
The product requires refrigeration for storage.
The dough requires no further mixing or treatment other than slicing and baking by the consumer to make the cookies.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
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 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.
Food is defined in paragraph 38-4(1)(b) of the GST Act to include ingredients for food for human consumption. Cookie dough is an ingredient for food for human consumption. Consequently it satisfies the definition of food in 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), or food that is a combination of one or more foods at least one of which is food of such a kind specified in Schedule 1.
Item 32 in the table in Schedule 1 (Item 32) is relevant to be considered in this case. It excludes 'food that is, or consists principally of, biscuits, cookies, crackers, pretzels, cones or wafers' from being GST-free. Item 32 is further expanded by clause 2 of Schedule 1 (Clause 2):
For the purpose of determining whether particular *food is covered by any of the items in the table relating to the category of prepared food, bakery products or biscuit goods, it does not matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption.
The cookie dough is covered under the term "cookies" in item 32 of Schedule 1. Furthermore, it is specifically listed in the "Detailed food list" which is published on the ATO website and which forms a public ruling for the purpose of section 105-60 of the Taxation Administration Act 1953. The relevant item on the list states, "cookie dough (supplied hot or cold or requiring cooking, heating, thawing or chilling prior to eating)" as taxable and that, "Schedule 1, item 32 and clause 2 of the GST Act apply".
It is the ATO view now that the need to slice the product off the tube into individual cookies before consumption does not preclude clause 2 of Schedule 1 from applying. That is, this requirement does not remove the product from its listing under Item 32 of Schedule 1 as taxable food.
A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes.
This means that the cookie dough is excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. Therefore the supply of the cookie dough is taxable where all the provisions of section 9-5 of the GST Act are satisfied.