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Edited version of private advice
Authorisation Number: 1051905165454
Date of advice: 4 October 2021
Ruling
Subject: GST and protein powders
Question
Is the supply of the ProductsGST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes. The supply of the Products is GST-free under section 38-2 of the GST Act.
Relevant facts and circumstances
You are registered for GST.
You are a food supplier. You plan to sell protein powder products (Products). They are mixture of different powders from fruit, and plants.
You plan to sell the Products to health food shops and maybe supermarkets in the future. In the shops, the products would be in the native food section.
You provide Products information via marketing brochure, the packaging and labelling, the ingredients and direction for use.
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 paragraph 38-4(1)(b)
A New Tax System (Goods and Services Tax) Act 1999 Schedule 1 clause 1
Reasons for decision
Summary
The supply of the Products is GST-free under section 38-2 of the GST Act because:
- the Products satisfy the definition of ingredients for food in paragraph 38-4(1)(b) of the GST Act as food for human consumption; and
- the supply of the Products does not fall within any other exclusions in section 38-3 of the GST Act.
Detailed reasoning
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 its supply is not excluded from being GST-free by section 38-3 of the GST Act.
Food is defined in section 38-4 of the GST Act to include ingredients for food for human consumption under paragraph 38-4(1)(b) of the GST Act.
Products information.....
The Products' direction for use is ...
The information you provided indicates that the Products are usually used as ingredient for food rather than consumed as food on its own or as ingredient for beverages. Therefore, the Products fall within the meaning of ingredients for food under paragraph 38-4(1)(b) of the GST Act.
However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if it is food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). ....(an analysis of the Products)
Hence we consider that the Products are not food of a kind specified in Schedule 1. In addition, the Products do not fall within any of the other exclusions in section 38-3 of the GST Act.
Therefore, the supply of the Products is a GST-free supply under section 38-2 of the GST Act.