Edited version of private advice

Authorisation Number: 1051881098527

Date of advice: 05 August 2021

Ruling

Subject: GST and food

Question

Is the supply of cleaned sugar cane GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

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 supply of the cleaned sugar cane is GST-free under section 38-2 of the GST Act because:

•                 the cleaned sugar cane satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act as food for human consumption (whether or not requiring processing or treatment), and

•                 the supply of the cleaned sugar cane does not fall within any of the exclusions in section 38-3 of the GST Act.

Relevant facts and circumstances

You sell cleaned sugar cane to retail outlets.

You are registered for GST.

You purchase unprocessed sugar cane directly from the sugar cane farmers.

You clean the mud, remove the leaves, measure the weight and cut to size and bundle the sugar cane.

Once the sugar cane is cleaned, they are placed in a cold room to maintain their freshness, until the customers place their orders.

The cleaned sugar cane can be eaten on its own or consumed without any further processing. The outer layer can be peeled off and the interior chewed to extract the juice.

You provided photos of the unprocessed sugar cane, the processing and the processed sugar cane.

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 paragraph 38-3(1)(c).

A New Tax System (Goods and Services Tax) Act 1999 section 38-4.

A New Tax System (Goods and Services Tax) Act 1999 Schedule 1, Clause 1, table.