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Edited version of private ruling
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Ruling
Subject: Yoghurt
Question
What is the goods and services tax (GST) classification applicable to yoghurt sold in a squeeze pack?
Answer:
The yoghurt product is a GST-free food product.
Relevant facts and circumstances
Your product is yoghurt that will be sold in a squeeze pack.
The yoghurt is made of, among other things, milk, milk solids, sugar and live yoghurt cultures.
The squeeze packaging is soft, with a screw type resealable opening.
The yoghurt has the consistency of normal yoghurt, which is able to be consumed via the resealable opening on the packaging.
The product will be placed in the chilled section of supermarkets, along with other yoghurt products.
You have provided copies of the artwork for the packaging including nutritional information.
The yoghurt will be available in more than one flavour.
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 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 food for human consumption and beverages for human consumption.
Due to the way this product is consumed it is possible it could be regarded as a beverage, and accordingly we will consider whether the product is a beverage for the purposes of the GST Act Beverage is defined in subsection 38-4(2) of the GST Act as 'Beverage includes water'. The Macquarie Dictionary, 1997, 3rd Edition (dictionary) provides the ordinary meaning of the word beverage, which is any kind of drink. Drink is defined as any liquid which is swallowed to quench thirst, for nourishment, etc.
Your product will be sold in a resealable container, this represents an easy and practical way for consumers to transport and ultimately, consume the yoghurt.
The labelling of the product refers to it as yoghurt. Your product will neither be taken to quench thirst, nor as an accompaniment to solid foods.
The product will be presented on retailers shelves together with other yoghurt food products and not alongside beverage products.
These characteristics indicate that your product is a food and not a beverage.
Under paragraph 38-3(1) of the GST Act, a supply of food of a kind specified in the table in clause 1 of Schedule 1 of the GST Act (schedule 1) is not GST-free. On the facts provided, your product is not food of a kind specified in schedule 1 and is not excluded from being GST-free. Furthermore, none of the other exclusions in section 38-3 of the GST Act apply to the supply of your yoghurt product.
The supply of your yoghurt product will therefore be GST-free under section 38-2 of the GST Act.