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Ruling

Subject: food

Question

Is the supply of seafood bouillabaisse GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No

Relevant facts:

· You carry on an enterprise of supplying food products to supermarkets.

· You are registered for goods and services tax (GST).

· You describe seafood bouillabaisse as follows:

· seafood and vegetables with tomato concasse, garlic, white wine, olives, peppers, herbs and spices in a stew

· the food requires refrigeration and it is sold chilled

· it is packed in a tray for two serves

o the food must be cooked before consumption.

o it is not consumed on the supplier's premises

· on the packaging it is marketed as a stew of restaurant quality

· is normally displayed near the fish section of the supermarket.

· Our Google search on "bouillabaisse" indicates that it is a traditional Provencal fish stew originating from the port city Marseille and it consists of various kinds of fish and shellfish and vegetables, flavoured with a variety of herbs and spices in a stew.

· You have confirmed that the seafood bouillabaisse is not a soup.

Reasons for decision

Food is defined in section 38-4 of the GST Act. Under section 38-2 of the GST Act a supply of food is GST-free. However, food that is described in section 38-3 of the GST Act is not a GST-free food.

The term food is defined in section 38-4 of the GST Act and includes amongst other things any of the following or any combination of the following:

· food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act)

· ingredients for food for human consumption (paragraph 38-4(1)(b) of the GST Act) and

· goods to be mixed with or added to food for human consumption (including condiments, spices, seasoning, sweetening agents or flavourings) (paragraph 38-4(1)(e) of the GST Act).

In this case the seafood bouillabaisse satisfies the meaning of food under section 38-4 of the GST Act as it is food for human consumption. Next we need to consider whether the seafood bouillabaisse is the type of food described in subsection 38-3(1) of the GST Act.

Subsection 38-3(1) of the GST Act provides that a supply of food is not GST-free if it is a supply of, amongst other things:

· food for consumption on the premises from which it is supplied, or

· hot food for consumption away from those premises, or

· food of a kind specified in Schedule 1 of the GST Act, or

· food that is a combination of one or more foods at least one of which is food of such a kind

Based on information provided, seafood bouillabaisse is not a food for consumption on the supplier's premises or a supply of hot food. You have advised that seafood bouillabaisse needs refrigeration and is not sold as hot food. It must be cooked before consumption.

Therefore we need to determine whether the seafood bouillabaisse is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Food listed under an item in Schedule 1 is not a GST-free food under section 38-3 of the GST Act.

Items 1 to 7 in Schedule 1 relate to prepared food and are intended to cover food that directly compete against take-aways and restaurants food. We consider item 4 of Schedule 1 (Item 4) may be relevant to seafood bouillabaisse. Item 4 is food marketed as a prepared meal, but not including soup.

When considering food under Item 4 we need to consider conditions outlined in clauses 2 and 3 of Schedule 1 of the GST Act. Clause 2 of Schedule 1 provides when considering prepared food in items 1 to 7, it does not matter whether the products are sold hot, cold or frozen or require cooking, heating, thawing or chilling prior to consumption. Clause 3 of Schedule 1 provides that Item 4 only applies to food that requires refrigeration or freezing for its storage.

Prepared Meal

The term 'prepared meal 'referred to in Item 4 is not defined in the GST Act and therefore takes its ordinary meaning.

'Meal' is defined in The Macquarie Concise Dictionary, 2001, revised 3^rd edition Macquarie Library Pty Ltd NSW (Macquarie Dictionary) as:

· one of the regular repasts of the day, as breakfast, lunch, or dinner.

· the food eaten or served for a repast.

This definition could be applied to a single food item or to a meal consisting of several food items.

The Macquarie Dictionary defines 'prepare' in relation to food as "to get ready for eating, as a meal, by due assembling, dressing or cooking".

The Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 (the EM) provides that the term 'prepared meal' is intended to cover a range of food products that:

· directly compete against take-aways and restaurants

· require refrigeration or freezing for storage and

· are marketed as a 'prepared meal'.

Included in this category (according to the EM at paragraph 1.33) are things such as:

prepared meals such as curry and rise dishes, mornay's and similar dishes sold cold by a take-away or supermarket that only need reheating to be ready for consumption

· fresh or frozen lasagne

· sushi

· cooked pasta dishes sold complete with sauce

· frozen TV dinners and

· fresh or frozen complete meals (for example single serves of a roast dinned including vegetables and low fat dietary meals).

Paragraph 1.34 of the EM provides examples of food items that are not considered to be prepared meals:

· frozen vegetables

· uncooked pasta products

· fish fingers

· baby food, baked beans, spaghetti and Irish stew that do not require refrigeration or freezing.

In determining whether food is marketed as a 'prepared meal' the activities of the seller are relevant. Consideration is given to the following:

· the name of the goods

· the price of the goods

· the labelling on any containers for the goods

· literature or instructions packed with the goods

· how the goods are packaged

· how the goods are promoted or advertised and

· how the goods are distributed.

Seafood bouillabaisse

Bouillabaisse is a traditional Provencal fish stew originating from the port city Marseille. It consists of various kinds of fish and shellfish and vegetables, flavoured with a variety of herbs and spices in a stew.

You confirm that the seafood bouillabaisse is not a soup. It needs refrigeration and is sold chilled. The food requires cooking before consumption. Therefore it satisfies clause 2 and 3 of Schedule 1.

The food is packed on a tray and each tray contains two serves of seafood bouillabaisse. The food is sold 'complete'. The packaging and labelling indicate that it is marketed as a prepared meal. It is marketed as a restaurant quality seafood stew. Therefore it competes with food from takeaway or restaurant. We consider it is a prepared meal under Item 4.

As the supply of seafood bouillabaisse is a prepared meal and is food of a kind specified in Item 4, it is therefore not a GST-free food under section 38-3 of the GST Act.