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Ruling
Subject: food
Question
Are the buns GST-free?
Answer:
No
Relevant facts:
You are registered for the goods and services tax (GST).
You carry on an enterprise.
You produce buns for sale.
The buns contain either a sweet filling or a sweet coating.
The products are not sold hot and are not for consumption on the suppliers' premises.
Reasons for decision
A supply of food is GST-free under section 38-2 of the 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 food for human consumption whether or not requiring processing or treatment (refer to paragraph 38-4(1)(a) of the GST Act). As you are selling bread (buns) for human consumption, they 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 is not GST-free if it is food of a kind specified in Schedule 1 to the GST Act. The food listed at Item 27 in Schedule 1 (Item 27) is 'bread (including buns) with a sweet filling or coating'.
The GST status of foods is outlined in the Australian Taxation Office (ATO) public ruling "Detailed Food List" (Food List). We enclose a copy for your reference. The buns listed on the Food List are:
Item |
GST status |
Notes |
buns with a sweet filling or coating (other than a glaze, supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) |
taxable |
Schedule 1, item 27 and clause 2 of the GST Act apply. |
finger buns (supplied hot or cold or requires cooking, heating, thawing or chilling prior to consumption) |
taxable |
Schedule 1, item 27 and clause 2 of the GST Act apply |
fruit buns and hot cross buns (no icing or filling) |
GST-free |
Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. |
hot cross buns, plain without a sweet filling or coating (a glaze is not considered a sweet coating) |
GST-free |
Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. |
Mantous (oriental buns without filling) |
GST-free |
Food for human consumption that is not of a kind specified in Schedule 1 of the GST Act. Schedule 1, item 27 of the GST Act does not apply because the buns do not have a sweet filling (refer to ATO ID 2004/675). |
You advised that the coating and filling on the buns are sweet in taste. Therefore we consider these products are food of a kind specified at Item 27. The buns are excluded from being GST-free under paragraph 38-3(1)(c) of the GST Act.