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Edited version of your written advice
Authorisation Number: 1012693485139
Ruling
Subject: GST and food products
Question
Is the supply of the food products subject to goods and services tax (GST)?
Answer
No.
Relevant facts and circumstances
• You are a company registered for GST.
• You carry on an enterprise of a supermarket retailer.
• You intend to sell 2 new food products (the food products) in your supermarkets.
• The food products are manufactured in Australia.
• The food products are made from a combination of ingredients and a little natural dark chocolate that have been crushed, blended and bottled. The product has no added oil, salt, gluten or dairy.
• You advise that the products are marketed predominately as spreads and their predominate use is that of spreads, notwithstanding that the labelling also suggests that it can be used as a "mix with smoothies…or mixed with yoghurt".
• The products will be sold by you from the spreads section of the supermarket alongside other spreads such as Vegemite, jams. peanut butter and Nutella.
Relevant legislative provisions
All references are to the A New Tax System (Goods and Services Tax) Act 1999:
Section 38-2
Section 38-3
Section 38-4
Schedule 1
Schedule 2
Summary
The supply of the food products are considered to be GST-free under paragraph
38-4(1)(e) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)
Detailed reasoning
Section 38-2 of the GST Act states that a supply of food is GST-free. The term 'food' is defined in section 38-4 of the GST Act
Some foods are not GST-free in accordance with section 38-3 and these include food or a combination of food specified in clause 1 of Schedule 1 of the GST Act and beverages other than those specified in clause 1 of Schedule 2 of the GST Act.
Based on the above, the food products are GST-free, because the products are goods to be mixed with or added to food for human consumption as per paragraph 38-4(1)(e) of the GST Act and the products are not excluded by any of the exceptions in section 38-3 of the GST Act.