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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012488744458

Ruling

Subject: GST and food

Question

Will your sale of the fruit product (Product) be GST-free?

Answer

Yes.

Relevant facts and circumstances

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

    · You are to sell the Product in your retail outlets.

    · The Product:

    · will be imported

    · is made from 100% raw fruit

    · has no additives (juice, sugar or sugar water etc)

    · will be sold frozen but can be eaten without cooking once thawed

    · will be marketed as an ingredient

    · is supplied with an additional product (packaged with the fruit) that can be used to help prepare the fruit for consumption.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 (GST Act):

Section 13-10

Section 38-2

Section 38-3

Section 38-4

Section 38-6.

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 any of the exclusions listed in section 38-3 of the GST Act.

Food is defined in section 38-4 of the GST Act to include food for human consumption (paragraph 38-4(1)(a)) and ingredients for food for human consumption (paragraph 38-4(1)(d)).

The Product is to be sold for human consumption. Consequently, the Product can be treated as food for GST purposes. Therefore, it is now necessary to determine if the Product is excluded from being food for GST purposes under any of the exclusions listed in section 38-3 of the GST Act.

The Product does not fall within any of the exclusions in section 38-3 of the GST Act except it may possibly be captured by paragraph 38-3(1)(c). Paragraph 38-3(1)(c) provides that a supply of food is not GST-free if it is food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Schedule 1 includes at Item 29:

    · frozen confectionery, frozen yogurt and frozen fruit products (but not frozen whole fruit).

Note that there are no other items in Schedule 1 to consider in relation to the Product.

In this case, the Product is made from 100% fruit. It has no additives (juice, sugar or sugar water or similar) and will be sold frozen.

For the purposes of Item 29 of Schedule 1, frozen whole fruit does not have to be a single uncut piece of fruit but can be fruit pieces or pureed fruit provided it is purely fruit without additives such as fruit syrup, sugar water or similar. Given this, the Product can be considered as frozen whole fruit and as such, is not captured by Item 29 of Schedule 1.

Consequently, the supply of the fruit in the Product will be GST-free as food under section 38-2 of the GST Act.

It is now necessary to consider whether the additional product can also be treated as a GST-free supply.

Additional product

Under 38-6 of the GST Act, a supply of packaging in which food is supplied GST-free is also GST-free provided it is necessary for the supply of the food and is packaging of a kind in which food of that kind is normally supplied. In this case, the supply of the product will be GST-free.

Although the fruit can be eaten without cooking once thawed, the Product will be marketed as an ingredient.

We consider the additional product plays a significant part in preparing the fruit for consumption and is not unlike a certain product that is generally supplied with products requiring cooking on a barbeque or griller. Like the certain product, the additional product is also packaged with the fruit and has no lasting value once used.

As such, we consider the additional product to be part of the packaging and hence GST-free under section 38-6 of the GST Act.

Given this, the supply of the Product will be GST-free under section 38-2 of the GST-Act.

Non-taxable importation

Section 13-10 of the GST Act provides that an importation is non-taxable if:

    · it is a non-taxable importation under Part 3-2 of the GST Act, or

    · it is a supply that would be GST-free or input-taxed had it been made in Australia.

In your case, your supply in Australia of the Product will be GST-free and therefore will be a non-taxable importation under section 13-10 of the GST Act.


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