Edited version of private ruling

Authorisation Number: 1011848112753

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Ruling

Subject: GST classification of a food item

Issue

The GST classification of a food item

Question

Is the supply of a frozen spring roll that has a sweet filling GST-free?

Advice/Answers

Yes

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You are registered for goods and services tax (GST) and carry on an enterprise as a food wholesaler.

You have requested a GST private ruling on the supply of a spring roll (Product)

The marketing literature refers to the Product as being a sweet roll that comes in different varieties.

The product is sold in a frozen state. It is not consumed from the premises that you supply it from.

The cooking instructions state that the oil should be preheated to 180ºc and to deep fry the sweet roll from the frozen state for a period of 3 minutes.

Summary

The supply of the Product is GST-free under section 38-2 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act). It is food for human consumption and is not excluded from being GST-free by section 38-3 of the GST Act.

Detailed reasoning

Subsection 7-1(1) of the GST Act provides that GST is payable on any taxable supplies.

Section 9-5 of the GST Act states:

You make a taxable supply if:

(a)  you make the supply for *consideration; and

(b)  the supply is made in the course or furtherance of an *enterprise that you
*carry on; and

(c)  the supply is *connected with Australia; and

(d)  you are *registered, or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST-free or input taxed. 

(* denotes a defined term in section 195-1 of the GST Act). 

For the supply of the Product to be a taxable supply, all of the requirements listed in section 9-5 of the GST Act must be satisfied.

Based on the information provided, you have satisfied the requirements in paragraphs 9-5(a) to 9-5(d) of the GST Act as follows:

· the supply of the Product is for consideration

· the supply of the Product is made in the course of the business that you carry on

· the supply is connected with Australia as your business is located in Australia, and

· you are registered for GST.

Therefore, the supply of the Product will be taxable to the extent that it is not input taxed or GST-free.

There is no provision for the supply of food to be input taxed other than section 40-130 of the GST Act which allows a non profit body to elect to treat its supplies of food made at certain school tuckshops and canteens as being input taxed. As this exception does not apply to you, then what remains to be considered is whether the supply of the Product is GST-free.

You have described the Product as being a spring roll and declare that this type of food is listed in the GST Food guide as being GST-free.

The Macquarie Dictionary defines a spring roll to be "a Chinese delicacy consisting of a savoury filling wrapped in thin dough and deep fried."

While your product is deep fried, we do not consider it to be a spring roll as it does not contain a savoury filling.

A supply of food is GST-free in accordance with section 38-2 of the GST Act, if it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in section 38-3 of the GST Act.

'Food' is defined in paragraph 38-4(1)(a) of the GST Act to include 'food for human consumption (whether or not requiring processing or treatment)'. The sweet rolls are food for human consumption and therefore satisfy the definition of food in paragraph 38-4(1)(a) of the GST Act.

However, under paragraph 38-3(1)(c) of the GST Act, a supply of food will not be GST-free if it is food of a kind that is specified in the third column of 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. As such, the issue in this case is whether it is 'food of a kind' specified in Schedule 1.

The phrase 'food of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meanings were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. Accordingly, it is considered that food will be 'food of a kind' listed in Schedule 1 if it is food belonging to the same class or genus as food listed in Schedule 1. The items from Schedule 1 that are of most relevance to this case are items 22 and 23 of Schedule 1.

Item 22 of Schedule 1 lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'. Item 23 of Schedule 1 lists 'tarts and pastries'. All these foods are baked. Therefore, in order for the product to belong to the same class of food as those listed under item 22 or item 23 of Schedule 1 it needs to be baked. As it is deep fried, it is not considered to be 'food of a kind' covered by these items.

The Product therefore falls outside the scope of Schedule 1. In addition, the supply of the Product in this case does not fall within any of the other exclusions in section 38-3 of the GST Act. You are therefore making a GST-free supply under section 38-2 of the GST Act when you sell the Product.