Edited version of private advice

Authorisation Number: 1051614556749

Date of advice: 3 December 2019

Ruling

Subject: Importation of food product

Question

Is the product that you import a non-taxable importation on the basis that it would have been a supply that was GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) if it had been a supply?

Answer

Yes.

This ruling applies for the following period:

1 July 20XX to 30 June 20XX.

Relevant facts and circumstances

You are registered for Goods and Services Tax (GST).

One of the products that you re-sell is first imported by you.

The product has been specifically manufactured as an ingredient for food and for no other purpose, and your customers purchase the product in order to use it for this purpose.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

Section 7-1

Section 13-5

Section 13-10

Section 38-2

Section 38-3

Section 38-4

Reasons for decision

Summary

As the product that you imported would have been a supply of GST-free food if it had been a supply, the importation is a non-taxable importation such that no GST is payable on the importation.

Detailed reasoning

Section 7-1 of the GST Act provides that GST is payable on taxable supplies and taxable importations.

According to section 13-5 of the GST Act, an importation is not a taxable importation to the extent that it is a non-taxable importation.

Section 13-10 of the GST Act defines what is meant by a non-taxable importation; with paragraph (b) of that section relevantly providing that an importation is a non-taxable importation if it would have been a supply that was GST-free or input taxed if it had been a supply.

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.

The meaning of food as given in section 38-4 of the GST Act is as follows:

(1)  Food means any of these, or any combination of any of these:

(a)  food for human consumption (whether or not requiring processing or treatment);

(b)  ingredients for food for human consumption;

(c)  ...

But does not include:

(g)  live animals (other than crustaceans or molluscs); or

(ga) unprocessed cow's milk; or

(h)  any grain, cereal or sugar cane that has not been subject to any process or treatment resulting in an alteration of its form, nature or condition; or

(i)    plants under cultivation that can be consumed (without being subject to further process or treatment) as food for human consumption.

Therefore, for the product to be GST-free under the food provisions of the GST Act the product must be food or an ingredient for food for human consumption; it is not sufficient for the product merely to be edible.

The product is specifically manufactured for use as an ingredient for making food which is consumed by humans.

You import the product and re-sell it to customers who use the product for making food for human consumption.

As such, the product is an ingredient for food for human consumption and therefore satisfies the definition of food in paragraph 38-4(1)(b) of the GST Act.

The product is also not excluded from being a food under paragraphs (g) to (i) of subsection 38-4(1) of the GST Act. Additionally, there is nothing in section 38-3 of the GST Act to exclude the product from being GST-free.

In conclusion, the importation of the product is a non-taxable importation, as it would have been a supply that was GST-free under section 38-2 of the GST Act if it had been a supply. As such, no GST is payable on the importation of the product.