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This edited version has been archived due to the length of time since original publication.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

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012928766041

Date of advice: 15 December 2015

Ruling

Subject: Goods and services tax (GST) and beverages

Question 1

Is GST payable on your sale of the following beverages?

      • Almond milk

      • Rice milk

      • Coconut milk

      • Hazelnut milk

      • Other dairy free milks

Answer

No.

Question 2

Is GST payable on your importation of the following beverages?

      • Almond milk

      • Rice milk

      • Coconut milk

      • Hazelnut milk

      • Other dairy free milks

Answer

No.

Relevant facts and circumstances

You are registered for GST.

You sell the following products:

      • Almond milk

      • Rice milk

      • Coconut milk

      • Hazelnut milk

      • Other dairy free milks

All of the products are plant based milks.

The products are beverages for human consumption.

There is nothing added to the milk, such as flavouring.

You supply the beverages within Australia to stores.

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 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

A New Tax System (Goods and Services Tax) Act 1999 Schedule 2

Reasons for decisions

Question 1

Summary

Your sales of the dairy free milks are GST-free supplies of beverages under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

GST is payable on any 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.

Section 38-2 of the GST Act states 'A supply of *food is GST-free'.

However, a supply of food is not GST-free if an exclusion in subsection 38-3(1) of the GST Act applies.

Paragraph 38-4(1)(c) of the GST Act provides that food includes beverages for human consumption. Your dairy free milk products are beverages for human consumption. Therefore, they are food for the purposes of section 38-2 of the GST Act.

Paragraph 38-3(1)(d) of the GST Act provides that a beverage, other than a beverage of a kind specified in the third column of the table in clause 1 of Schedule 2 to the GST Act, is not GST-free.

Item 1(a) in the table in clause 1 of Schedule 2 to the GST Act (item 1(a)) lists 'milk' amongst other things.

Item 2 lists beverages consisting of products referred to in item 1 to the extent of at least 95%, but not including flavoured beverages.

The Australian Taxation Office considers that the term 'milk' for the purposes of item 1(a) includes animal based milks and also plant based milks.

The Detailed Food List on the ATO website explains that the ATO has been treating plant based milks, such as oat milk, as milk for the purposes of item 1(a) since 18 June 2010.

Your products consist of plant based milks and nothing else is added. Therefore, your products are covered by item 1(a).

Furthermore, rice milk is specifically listed in item 4 in the table in clause 1 of Schedule 2 to the GST Act.

As the products in question are beverages for human consumption covered by an item/s in the table in clause 1 of Schedule 2 to the GST Act, the exclusion at paragraph 38-3(1)(d) of the GST Act does not apply.

As the products in question are food and none of the exclusions in subsection 38-3(1) of the GST Act apply, your sales of the products 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 any taxable importation.

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.

As the sales of the products in question are GST-free, GST is not payable on the importation of the products.


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