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This edited version has been archived due to the length of time since original publication.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.

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Edited version of your written advice

Authorisation Number: 1012765728558

Ruling

Subject: Food classification

Question

Is the supply of your product GST-free?

Answer

Yes

Relevant facts and circumstances

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

• You supply a product.

• During a preparation process, the product is added to another product.

• The product helps to preserve food.

Reasons for decision

Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you make a taxable supply if:

    • you make the supply for consideration

    • the supply is made in the course or furtherance of your enterprise

    • the supply is connected with Australia; and

    • you are is registered or required to be registered.

However the supply is not taxable to the extent that it is GST-free or input taxed

Your supplies satisfy all the criteria in section 9-5 of the GST Act. However, we need to consider whether your supplies are GST free under the provisions of the GST Act.

Food

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), and

    • food ingredients for food for human consumption (paragraph 38-4(1)(b) of the GST Act).

The product is an ingredient for food preparation. It helps to preserve food. Therefore it satisfy the meaning of food (paragraph 38-4(1)(b) of the GST Act).

Under paragraph 38-3(1)(c) of the GST Act foods that are specified in the third column of the table in clause 1 of Schedule 1 (Schedule 1) are excluded from being GST-free.

In this case, the ingredient is for food preparation and it is not food not listed in Schedule 1 of the GST Act and is therefore not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act . The supply of the food ingredient is GST free under section 38-2 of the GST Act.


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