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Edited version of your private ruling
Authorisation Number: 1012591135198
Ruling
Subject: Scones
Question
Is the supply of flavoured scones taxable?
Answer
Yes
Relevant facts:
· You are registered for the goods and services tax (GST).
· You carry on an enterprise of supplying bakery products.
· You have a product which is flavoured scones.
· You advised that the scone dough contains scone mix and flavouring agents. The dough is baked at high temperature.
· 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)(paragraph 38-4(1)(a) of the GST Act). As the scones are food 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 the table in clause 1 of Schedule 1 to the GST Act (Schedule 1) Foods listed in item 26 in Schedule 1 (Item 26) are scones and scrolls.
You advised that your food products are flavoured scones. The scones are made from the scone dough which contains scone mix and flavouring agents. The scone dough is baked at high temperature. The flavoured scones are food of a kind listed under item 26 and are therefore excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act.