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Edited version of your private ruling
Authorisation Number: 1012490001688
Ruling
Subject: GST and pastries
Question 1
Are you making a GST-free supply when you supply a fried savoury-filled pastry product?
Answer
Yes.
Relevant facts and circumstances
· You are registered for GST purposes.
· You carry on an enterprise of supplying food products.
· One of your food products that you sell is a fried savoury-filled pastry (pastry).
· The pastry is semi-cooked, frozen and ready to cook in minutes.
· The cooking instructions on the packet advise that for best results thaw first and fry the pastry in a pan with a little olive oil.
· You supply the pastry in a frozen packet state.
· You do not sell the pastry for consumption on the premises or as hot food for consumption away from the premises.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 38-2.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-3.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-4.
A New Tax System (Goods and Services Tax) Act 1999 Schedule 1.
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) if the product satisfies the definition of food in section 38-4 of the GST Act and the supply is not excluded by section 38-3 of the GST Act.
Food is defined in paragraph 38-4(1)(a) of the GST Act to include 'food for human consumption (whether or not requiring processing or treatment)'. The pastry is food for human consumption.
Subsection 38-3(1) of the GST Act provides that a supply of food is not GST-free under section 38-2 of the GST Act if it is a supply of:
(a) food for consumption on the premises from which it is supplied; or
(b) hot food for consumption away from those premises; or
(c) 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; or
(d) a beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2; or
(e) food of a kind specified in regulations made for the purposes of this subsection.
The pastry that you supply is not food for consumption on the premises and it is not hot food for consumption away from those premises. It is not a beverage and is not food of a kind specified in regulations. The pastry is not specifically listed in the third column of the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). As such, the issue in this case is whether the pastry is 'food of a kind' specified in Schedule 1.
The phrase 'food of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meanings were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. Accordingly, it is considered that food will be '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. The items from Schedule 1 that are of most relevance to this case are items 22 and 25 of Schedule 1.
Item 22 of Schedule 1 lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'. All of these products are baked. Item 25 of Schedule 1 lists 'pastizzi, calzoni and brioche'. All of these products are also baked.
The Food Industry Partnership - issues register considers similar types of pastry products to your pastry at Issue 30 (Pastry products: What are considered 'pastries' for the purpose of Schedule 1).
It advises that in order to be a food of a kind of those in items 22 or 25 a product must be baked. It provides that those products that are fried cannot be considered to be of the same kind.
While this view is only guidance and not binding on the Commissioner, Issue 30 refers to the Detailed food list (Food List) for the Australian Taxation Office (ATO) view.
The food products that are considered in Issue 30 are also considered in the Food List (such as samosas, curry puffs, dim sims, spring rolls). The Food List is a public ruling for GST purposes.
The Food List advises that these products are GST-free. The reason provided is that items 22, 23 and 25 of the GST Act do not apply because the products are fried (not baked) savoury products that are not considered similar to pies, pasties, sausage rolls, tarts, pastries, pastizzi, calzoni or brioche.
According to the ATO view in the Food List, the pastry therefore falls outside the scope of Schedule 1.
Based on this reasoning the supply of the pastry by you does not fall within any of the exclusions in section 38-3 of the GST Act. Therefore, you are making a GST-free supply of food under section 38-2 of the GST Act when you supply the pastry.