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Edited version of your written advice
Authorisation Number: 1012743185786
Ruling
Subject: Food classification
Question
Is the supply of the seafood GST-free?
Answer
Yes
Relevant facts and circumstances
• You are registered for the goods and services tax (GST).
• You import seafood into Australia for wholesale. The seafood includes raw roe.
• The raw roe is stored frozen or chilled in brine solution.
• The raw roe does not have savoury flavour.
• The roe can be eaten raw.
Reasons for decision
A supply of a product 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).
The raw roe satisfies the meaning of food as it is food for human consumption, whether or not requiring processing or treatment.
However, subsection 38-3(1) of the GST Act specifies some foods are excluded from being GST-free. The relevant paragraph that may apply to the raw roe is paragraph 38-3(1)(c) of the GST Act and it provides that a supply of food is not GST-free if it is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1) or it is food consisting of a combination of one or more foods with at least one of which is food specified in Schedule 1.
The food 'caviar and similar fish roe' is listed in item 17 of Schedule 1 (item 17) and therefore are taxable foods. The Detailed Food List (DFL) ruling lists the following as foods listed in item 17:
Food items |
GST |
Reasons |
fish roe (and products consisting principally of fish roe) |
Taxable |
Schedule 1, item 17 of the GST Act applies. |
roe and products consisting principally of roe |
Taxable |
Schedule 1, items 17 and 18 of the GST Act apply. |
tarama (cod or carp roe) |
Taxable |
Schedule 1, item 17 of the GST Act applies. |
Therefore the foods listed in item 17 are roe from fish, carp or cod. However, the ruling also states that roe or product consisting principally of roe could be food listed in item 18 of Schedule 1 (item 18).
Therefore we have to determine whether the Kina roe is food of kind listed in item 17 and item 18.
Item 17
The Further Explanatory Memorandum (EM) to the GST Act states:
Fur 1.47 Schedule 1 lists products that will be taxed as savoury snacks. This list is also based on the WST definition with some minor changes. Caviar and other fish roe products are specifically included as savoury snacks.
Item 17 applies to all fish roe or caviar because they are consumed as savoury snacks. The words "caviar and similar fish roe" as described in item 17 is not defined in the GST Act and therefore they take on the ordinary meaning. The meaning of these words is defined in The Macquarie Concise Dictionary (3nd Edition) (Dictionary) as follows:
roe "1. the mass of eggs, or spawn, within the ovarian membrane of the female fish (hard roe). 2. the milt or sperm of the male fish (soft roe)"
fish "1. any of various cold-blooded, completely aquatic vertebrates, having gills, fins, and typically an elongated body usually covered with scales"
caviar "1. the roe of sturgeon and other large fish, pressed and salted, considered a great delicacy
Therefore, the word "roe" generally means fish eggs or milt and for GST purposes the foods listed in item 17 (caviar and similar fish roe) will generally mean roe from fish.
Therefore, as the raw roe is not from fish, they are not food listed in item 17. The EM specifically states that caviar or other roes of fish that are consumed as savoury snacks, will be food listed in item 17.
Item 18 - roe and products consisting principally of roe
The Detailed Food List ruling provides that "roe and products consisting principally of roe" could be listed under item 18 if they are savoury snack foods.
Item 18 of Schedule 1 (item 18) states:
food similar to that covered by item 15 or 16, whether or not it consists wholly or partly of any vegetable, herb, fruit, meat, seafood or dairy product or extract and whether or not it is artificially flavoured
Therefore for a food to be listed in item 18, a food needs only to be "similar" to foods that are listed in items 15 or 16 of Schedule 1. The word "similar" is not defined in the GST Act and therefore takes on the ordinary meaning. The meaning of "similar" is defined in the Macquarie Dictionary (Dictionary) as:
having likeness or resemblance, especially in a general way
Therefore, the roe and products consisting principally of roe are listed in item 18 where the food display likeness or resemblance in a general way to foods listed in items 15 or 16 of Schedule 1.
Item 15 of Schedule 1 (item 15) includes potato crisps, sticks or straws, corn crisps or chips, bacon or pork crackling or prawn chips.
Item 16 of Schedule 1 (item 16) includes seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way.
An example of a food that is listed in item 18 which is similar to food listed in item 15 is banana chips. The explanation is outlined in ATOID 2003/1142 and it states:
Banana chips are thin, sliced discs in the form of chips and are cooked in oil so that they are crisp and crunchy. They are generally supplied and labelled as banana 'chips'. Banana chips possess many of the characteristics of the foods specified in Item 15 and are therefore, similar to those foods.
Furthermore, banana chips can be distinguished from foods in the class of dried fruit, due to the cooking and flavouring process used in their manufacture. Dried fruits are dried to varying extents, but do not exhibit other similarities to the foods listed in Item 15. Accordingly, banana chips are food of a kind covered by Item 18 …
Therefore foods listed in item 18 would generally possess characteristics of the foods specified in Item 15, such as being thin, sliced in the form of chips, sticks or straws and cooked so that they are crisp and crunchy, etc.
The raw roe is not food similar to those foods covered by items 15 and 16 as the raw roe has not been cooked or treated by salting, spicing, smoking, or roasting, or in any other similar way to the foods listed in items 15 and 16. The roe can be eaten raw. Therefore the raw roe is not food listed in item 18.
Therefore, the raw roe is not food of a kind that is listed in Schedule 1 and is therefore not excluded from being GST-free by subsection 38-3(1) of the GST Act. A supply of the raw roe is GST-free under section 38-2 of the GST Act.