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Ruling
Subject: GST classification - Puff Pastry Products
Question
Are your Puff Pastry Products GST-free in accordance with Section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No.
Relevant facts and circumstances
Food products are supplied to you, and you will supply the products to the public.
The products are puff pastry snacks which contain a filling.
These fillings are smoked salmon and cream cheese, or tomato and mozzarella.
The products are designed as a convenience food to be heated and served.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999
Reasons for decision
Summary
A supply of the product is not GST-free under section 38-2 of the GST Act as it is a supply of food of a kind specified in Schedule 1 of the GST Act (Schedule 1) (section 38-3 GST Act).
The puff pastry snack products are therefore taxable.
Detailed reasoning
Food is defined in paragraph 38-4(1)(a) of the GST Act to include food for human consumption whether or not it requires processing or treatment. The pastry products you supply are considered to be food under this definition.
Section 38-2 of the GST Act states that a supply of food is GST-free, however under section 38-3 of the Act a supply is not GST free if it is a supply of food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind. If your food is of a kind specified in Schedule 1 it will not be GST free.
The phrase 'of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meaning were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. It is considered that food is '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.
Schedule 1 considers various categories of food that are not GST free, one of these being bakery products. The description 'bakery products' is not an operative provision (section 182-15), but is considered explanatory in that it describes the purpose or object underlying the clause (section 182-10). It is intended that bakery products of the kind or class listed in the schedule are not GST free.
Within the 'Bakery products' category there are a number of table items that are relevant to your product. These are item 23 (tarts and pastries), item 25 (pastizzi, calzone and brioche) and item 22 (pies (meat, vegetable or fruit), pasties and sausage rolls).
For the purposes of determining whether a particular food is covered by any of the items in the table relating to bakery products it does not matter whether the food is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption (clause 2, Schedule 1).
Item 23 - tarts and pastries
As considered above, clause 1 of Schedule 1 lists food that is not GST-free. At Item 23 it includes pastries. The word 'pastry' is defined in The Macquarie Dictionary (version 5.0) as
1. food made of paste or dough, as the crust of pies, etc.
2. articles of food of which such paste forms an essential part, as pies, tarts, etc.
Your products are puff pastry filled with differing ingredients. They are an article of food where the pastry or dough forms an essential part, and therefore they are considered to be a pastry as described. Under item 23 they are therefore a food that is not GST free, and as such they will be taxable.
Item 25 - pastizzi, calzone and brioche
Item 25 lists pastizzi, calzone and brioche as food that is not GST-free. The term pastizzi is not defined in the dictionary, however a pastizzi is a traditional Maltese pastry that is made of puff pastry and is baked. It is traditionally filled with ricotta cheese but it may also contain various other fillings.
Your pastries are considered to be food of a kind similar to a pastizzi and are therefore not GST-free. As such they will be taxable.
This view is confirmed by consulting the Detailed food list (available on the ATO website). The Detailed food list provides details of the GST status of major food and beverage product lines. It is a public ruling for the purposes of the Taxation Administration Act 1953.
pastry triangles/parcels (filled and baked, supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) |
taxable |
Schedule 1, item 25 and clause 2 of the GST Act apply. Food of a kind similar to pastizzi. |
Item 22 - pies (meat, vegetable or fruit), pasties and sausage rolls
Alternatively, your products can also be considered under Item 22 of the GST Act, being "pies (meat, vegetable or fruit), pasties and sausage rolls".
The Macquarie Dictionary defines 'pie' as
1. a baked dish consisting of a sweet (fruit, etc.) or savoury (meat, fish, etc.) filling, enclosed in or covered by pastry, or sometimes other topping as mashed potatoes.
and 'pastie' as
1. a type of pie in which a circular piece of pastry is folded around a filling of vegetables, meat, etc., and baked.
This Item therefore covers all products which have a pastry outer which are filled with meat, vegetables or other fillings, and are baked.
The products in question are products which are pastry filled with these fillings. Therefore, they are covered as either pies or pasties in Item 22. They are therefore food of a kind that is not GST free, and as such they will be taxable.
Summary
Our view is that your products are a kind of pastry under item 23. However, it can be seen that your product will match several of the foods specified in the bakery products category of Schedule 1. The products are therefore food of a kind specified in the third column of the table in clause 1 of Schedule 1, and are therefore food that is not GST-free under section 38-3 of the GST Act.