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Edited version of your written advice
Authorisation Number: 1012918624989
Date of advice: 26 November 2015
Ruling
Subject: GST and pies
Question 1
Is the supply of the Product a GST-free supply under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No.
Relevant facts and circumstances
The Product is a fresh, un-cooked meat and vegetable filling, topped with pastry, which is sold to the customer in an oven-proof container. The customer is then able to simply place the product directly in the oven for cooking.
The Product doesn't have a pastry base, rather is contained in the cooking instrument provided. Further, the Product is not eaten in the traditional way a pie would be consumed, but requires the customer to use utensils to eat direct from the cooking instrument, or to remove the contents from the container to another plate or bowl.
Relevant legislative provisions
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 decision
Summary
The supply of the Product is not a GST-free supply under section 38-2 of the GST Act. Supplies of the Product are taxable due to Item 22 in Schedule 1 of the GST Act.
Detailed reasoning
A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in section 38-3 of the GST Act.
The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment).
The Product is for human consumption and therefore falls within the meaning of food in section 38-4 of the GST Act.
Section 38-3 of the GST Act provides when food is not GST-free and relevant to the Product is paragraph 38-3(1)(c) of the GST Act.
Under paragraph 38-3(1)(c) of the GST Act, a supply of food will not be 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. As such, the issue in this case is whether it is 'food of a kind' specified in Schedule 1.
The phrase 'food of a kind' is not defined in the GST Act. However, the words 'of a kind' and their meanings were considered in Hygienic Lily Ltd v. Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399. Accordingly, it is considered that food will be 'food of a kind' listed in Schedule 1 if it is food belonging to the same class or genus as food listed in Schedule 1.
Pertinent to the Product is Item 22 in Schedule 1 which lists:
Pies (meat, vegetable or fruit), pasties and sausage rolls
The GST Act does not define 'pie', nor is there a widely used trade definition; both producer and consumer rely on what they know to be a 'pie'. Given this background we rely on the ordinary meaning for classification. The Macquarie Concise Dictionary 3rd Edition defines 'pie' as:
a baked dish consisting of a sweet (fruit, etc.) or savoury (meat, fish, etc.) filling, enclosed in or covered by pastry, or sometimes other topping as mashed potatoes.
In the past we have seen this definition cover products as diverse as shepherd's pie and potato borekas. We consider that the Product falls within the genus suggested by this definition; it is covered by pastry and promoted as a type of pie. The Product therefore falls within the coverage of Item 22 in Schedule 1. It follows that the Product is subject to GST.