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Ruling
Subject: unflavoured almond milk
Question
Is the supply of your product GST-free?
Decision
Yes
Relevant facts:
You are registered for goods and services tax (GST).
You request advice on the GST status of the supply of your product.
The product is marketed as a beverage for human consumption.
The product consists of a natural ingredient, water and sugar added as a sweetener
Reasons for decision
A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).provided that the supply does not come within any of the exclusions listed in section 38-3 of the GST Act.
Food is defined in paragraphs 38-4(1)(c) and 38-4(1)(d) of the GST Act to include beverages for human consumption and ingredients for beverages for human consumption. The almond milk is supplied as a beverage for human consumption.
However, under paragraph 38-3(1)(d) of the GST Act, a supply of a beverage or an ingredient for a beverage is not GST-free unless it is of a kind listed in the table in clause 1 of Schedule 2 to the GST Act (Schedule 2). As the product is similar to other beverages, we consider item 4 of Schedule 2 maybe applicable to your product.
Beverages which are listed under item 4 of Schedule 2 are 'beverages consisting principally of soy milk or rice milk, but not including flavoured beverages'. Flavoured soy milk or rice milk are specifically not covered by item 4 of Schedule 2.
The explanation on beverages listed under item 4 of Schedule 2 is outlined in the Australian Taxation Office public ruling "Detailed Food List" (Food Lists). We enclose a copy for your reference. Beverages that are listed on the Food Lists under item 4 of Schedule 2 are:
Item |
GST status |
Notes |
rice milk (unflavoured) |
GST-free |
Schedule 2, item 4 of the GST Act applies.. |
soy milk (sweetened) |
GST-free |
Schedule 2, item 4 of the GST Act applies because the soy milk is only sweetened not flavoured (refer to ATO ID 2001/366). |
soy milk (unflavoured) |
GST-free |
Schedule 2, item 4 of the GST Act applies. |
As your product is prepared from a natural ingredient, it is similar to the soy milk (from soybean) and rice milk (from rice). Therefore, the unflavoured product is similar to beverages of a kind specified under item 4 of Schedule 2.
In addition, soy milk (sweetened) is listed on the Food Lists as GST-free under item 4 of Schedule 2. The sugar added to the soy milk is a sweetener and is not considered to be a flavouring. Therefore your product (sweetened) is considered to be an unflavoured product.
Your unflavoured product is similar to beverages listed under item 4 of Schedule 2, and is therefore not excluded from being GST-free under section 38-3 of the GST Act.