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Ruling
Subject: GST and the importation and sale of a product (Product)
Question
Is your supply of the Product subject to goods and services tax (GST)?
Answer
No. Your supply of the Product is GST-free as food for human consumption. Your importation of the Product is also non-taxable as a consequence.
Relevant facts and circumstances
You are registered for GST.
You import the Product.
You sell the Product to wholesalers and retailers.
The Product is marketed and sold as a sweetening agent.
Relevant legislative provisions
All references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act):
Section 13-10
Section 38-2
Section 38-3
Section 38-4
Reasons for decision
The only provision in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) that may allow your supply of the Product to be GST-free is as a supply of food which is GST-free under section 38-2 of the GST Act. However, the food must not come within any of the exclusions listed in section 38-3 of the GST Act.
Subsection 38-4(1) of the GST Act defines food for the purposes of section 38-2 of the GST Act. Of the foods defined in this provision that is the most relevant to your circumstances is
paragraph 38-4(1)(e) that provides for sweetening agents for food for human consumption.
In your case, the Product is fit for human consumption and is marketed and sold as a sweetening agent. Hence, the Product is a food, the supply of which can be treated as being GST-free provided it is not excluded from being GST-free under section 38-3 of the GST Act.
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 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.
In this case, the Product does not come under any of the items listed in Schedule 1. It also does not fall within any of the other exclusions listed in section 38-3 of the GST Act. Therefore, your supply of the Product is GST-free under section 38-2 of the GST Act.
Non taxable importation
Please note that section 13-10 of the GST Act provides that an importation is a non-taxable importation if:
§ it is a non-taxable importation under Part 3-2 of the GST Act, or
§ it would have been a supply that was GST-free or input taxed if it had been a supply (for example, it would be a GST-free supply had the supply been made in Australia).
In your case, your supply of the Product in Australia is GST-free and consequently, your importation is non-taxable under section 13-10 of the GST Act.