Edited version of private ruling

Authorisation Number: 1011696916405

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Ruling

Subject: GST food classification of the 'Food Product'

Question 1

Is the supply of the food product a GST-free supply?

Answer 1

No, the supply of the food product is not a GST-free supply.

Relevant facts and circumstances

You have requested a private ruling on the GST classification of the food product.

The food product is an arrangement of various products sold in a multi-segmented tray-like container.

The picture on the front of the product shows the ingredients served in a number of separate serving plates and bowls and states 'serving suggestion'.

The ingredients of the product are listed on the back of the outer packaging:

The storage instructions on the packaging are: 'Keep refrigerated. Store at or below 5°C. Once opened, consume within 2 days.'

On your website the preparation instructions for the product advise that it is ready to eat. The number of servings per package is 16.

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 and

A New Tax System (Goods and Services Tax) Act 1999 Schedule 1.

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 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 section 38-4 of the GST Act to include, amongst other things, food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act).

The product considered in this ruling is made up of different foods for human consumption and therefore 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 that is specified in clause 1 of Schedule 1 to the GST Act (Schedule 1).

Item 5 of Schedule 1 to the GST Act (Item 5) is of most relevance when considering your product. It falls within the category of 'Prepared food' and includes 'platters etc. of cheese, cold cuts, fruit, or vegetables and other arrangements of food'.

In understanding the kind of food which is considered under Item 5 we refer to The Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 (the EM). Paragraph 1.31 of the EM explains that:

[t]he category of prepared food … is intended to cover a range of food products that directly compete against take-aways and restaurants. These products will always be taxable…

We therefore need to consider whether the product is a platter or arrangement of food which is of a kind that would compete against take-aways and restaurants.

The term 'platter' is not defined in the GST Act, so we refer to the ordinary definition of the word. The Macquarie Dictionary defines 'platter' as:

1. a large, shallow dish, commonly oval, for holding or serving meat, etc.

Item 5 also includes 'other arrangements of food'. This means that arrangements of food, not necessarily in the form of a platter, may fall within the scope of item 5.

The Detailed food list provides the GST status of the supply of the following items as taxable under item 5:

· antipasto platter

· arrangements of food (platters)

· cheese platters

· cold cut platter

· fruit platter

· platters of cheese, cold cuts, fruit, vegetables and other arrangements of food

· seafood platter

· small goods platter

· vegetable platter.

In determining the classification of your product we have considered the item as a whole, looking at the following details:

· the tray contains a selection of food products

· the foods are arranged in a multi-segmented plastic dish/tray

· the net weight is 1 kg

· meats or crackers are not included.

· it can be uncovered and placed on a table ready for serving.

· the preparation instructions on your website advise that the product is 'ready to eat'.

You have contended that the product is not a platter, primarily because the product is not meant to be a platter that is opened and served in the container that it is sold in and is merely meant to be a simple way of purchasing a selection of food products for use in making up a platter for entertaining.

However, we consider that it is not uncommon for the identified food products to be served together in a segmented dish. The product is labelled and marketed as a platter. We also consider the product is of a kind or similar to platters purchased from delicatessens and takeaway shops.

While you consider that the product is not a platter in the traditional sense, we are of the view that the product is an arrangement of food and is of a kind specified in Schedule 1, pursuant to paragraph 38-3(1)(c) of the GST Act.

In summary, the product is an assortment or selection of food products provided together in a platter-like tray, the foods are ready to eat after removing the cover. The product is designed to serve approximately 16 people and is similar in size to a platter sold from a delicatessen. It is designed to be a convenient way for consumers to serve a selection of food products for entertaining purposes and provides the same function as a platter or other arrangement of food.

The product therefore belongs to the same class as a platter or other similar arrangement of food, and falls under item 5 of Schedule 1 of the GST Act.