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Edited version of your written advice
Authorisation Number: 1012964426488
Date of advice: 1 March 2016
Ruling
Subject: GST and supply of unprocessed frozen food cut into small squares
Questions:
1. ls your supply of unprocessed frozen food cut into small squares (food) GST-free?
2. Is GST payable on the importation of the food?
Answers
1. Yes, your supply of the food is GST-free.
2. No, GST is not payable on the importation of the food.
Relevant facts and circumstances
You are registered for goods and services tax (GST).
You import the food and supply in Australia. The food contains 100% whole additive free food. The food is cut into small squares before freezing. There is no further processing before packaging.
The serving suggestion is for the food to be pureed into smoothies, juices or eaten whole.
You supply the food for human consumption in Australia.
Question 1:
Under section 38-2 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a supply of food is GST-free. The meaning of the term food for GST purposes is defined in section 38-4 of the GST Act. This definition of food includes food for human consumption, whether or not it requires processing or treatment.
The food is food for human consumption, and therefore satisfy the definition of food under section 38-4 of the GST Act.
However, under paragraph 38-3(1)(c) of the GST Act, certain supplies of food are not GST-free if it is food of a kind specified in the third column of the table in Schedule 1 of 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 food is not food listed, or of a kind listed, at any of the items in Schedule 1. Item 29 lists frozen food products but excludes frozen whole food (that is, food without additives). Additionally, the food is not food that is a combination of one or more foods at least one of which is food of such a kind. Hence, the food is not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act.
The food is not excluded from being GST-free by virtue of any of the other paragraphs of subsection 38-3(1) of the GST Act. Therefore, your supply of the food is GST-free under section 38-2 of the GST Act.
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 of the GST Act, or
(b) it would have been a supply that was *GST-free or *input taxed if it had been a supply.
Your sale of the food is GST-free. Therefore, your importation of the food is a non-taxable importation under paragraph 13-10(b) of the GST Act. Hence, GST is not payable on your importation of the food.
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
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