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Edited version of your written advice
Authorisation Number: 1012896635631
Date of advice: 16 October 2015
Ruling
Subject: Goods and services tax (GST) and food
Question 1
Is GST payable on your sale of (brand name) Dairy Desserts?
Answer
No.
Question 2
Is GST payable on the importation of (brand name) Dairy Desserts?
Answer
No.
Relevant facts and circumstances
You are registered for GST.
You import into Australia and sell (brand name) Dairy Desserts. The product is marketed in Australia in various flavours.
You currently sell the product to a supermarket chain operating in Australia, on a DDP basis.
Each product comes in an adjoining pack of (number) x (number) gram plastic containers.
The packaging of the products states 'Dairy Dessert'.
The products are refrigerated dessert products. They must be stored below (a very cold temperature) but not frozen.
The products are positioned in the supermarket near the custard products.
The products constitute principally of dairy products. The very large majority of each product is milk and cream
Each product also contains sugar, thickeners and flavours.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5
A New Tax System (Goods and Services Tax) Act 1999 Section 13-5
A New Tax System (Goods and Services Tax) Act 1999 Section 13-10
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
Reasons for decisions
Question 1
Summary
Your sales of the products are GST-free sales of food under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Detailed reasoning
GST is payable on your taxable supplies.
You make a taxable supply where you satisfy the requirements of section 9-5 of the GST Act, which states:
You make a taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that
you *carry on; and
(c) the supply is *connected with the indirect tax zone; and
(d) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free
or *input taxed.
(*Denotes a term defined in the GST Act)
The indirect tax zone is Australia.
You meet the requirements of paragraphs 9-5(a) to 9-5(d) of the GST Act. This is because:
• you supply the products in question for consideration
• you supply the products in the course or furtherance of an enterprise that you carry on
• the supplies are connected with Australia, and
• you are registered for GST.
There are no provisions of the GST Act under which your sales of the products would be input taxed.
Therefore, what remains to be determined is whether your sales of the products are GST-free.
GST-free supplies of food
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, amongst other things, food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The products considered in this ruling are food for human consumption and therefore, satisfy the definition of food in the GST Act.
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 that is specified in the third column of the table in clause 1 of Schedule 1 to the GST Act (Schedule 1) or food that is a combination of one or more foods at least one of which is food of such a kind.
The Detailed Food List on the Australian Taxation Office website classifies the sale of dairy desserts as GST-free.
The products in question are not covered by any of the items in Schedule 1 to the GST Act and the products are not food that is a combination of one or more foods at least one of which is food of such a kind.
Therefore, the exclusion at paragraph 38-3(1)(c) of the GST Act does not apply.
None of the exclusions in subsection 38-3(1) of the GST Act apply. Therefore, your sales of the products in question are GST-free under section 38-2 of the GST Act. Hence, GST is not payable on your sales of the products.
Question 2
GST is payable on taxable importations.
Subsection 13-5(1) of the GST Act states:
You make a taxable importation if:
(a) goods are imported; and
(b) you enter the goods for home consumption (within the
meaning of the Customs Act 1901).
However, the importation is not a taxable importation to the extent
that it is a *non-taxable importation.
Section 13-10 of the GST Act states:
An importation is a non-taxable importation if:
(a) it is a non-taxable importation under Part 3-2; or
(b) it would have been a supply that was *GST-free or *input
taxed if it had been a supply.
Your sales of the products in question are GST-free. Therefore, your importation of these products are non-taxable importations under paragraph 13-10(b) of the GST Act.
Hence, GST is not payable on your importation of the products.