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Edited version of private advice
Authorisation Number: 1052022015190
Date of advice: 16 August 2022
Ruling
Subject: GST and supply of food additives
Question
Is the supply of the specified food additive (the Product) that is packaged and marketed for retail sale subject to GST?
Answer
No.
A supply of food is GST-free under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (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 Product is marketed solely for food purposes. Therefore, the Product satisfies the definition of food under paragraph 38-4(1)(b) of the GST Act.
However, under paragraph 38-3(1)(e) of the GST Act, a supply is not GST-free if it is food of a kind specified in regulations made for the purposes of subsection 38-3(1) of the GST Act.
Subsection 38-3.01(1) of the A New Tax System (Goods and Services Tax) Regulations 2019 (GST Regulations) provides that the supply of a food additive is not GST-free unless it is an exempt food additive.
The term 'exempt food additive' is defined in subsection 38-3.01(2) of the GST Regulations to include a food additive which at the time of supply is packaged and marketed for retail sale.
Based on the information provided, we consider that the Product is a food additive that is packaged and marketed for retail sale. The supply of the Product therefore is not a taxable supply. The supply of the Product is GST-free.
Relevant facts and circumstances
You are registered for GST.
You import and sell the Product in Australia.
You sell the Product online and in person through your warehouse. The Product can be purchased by the general public.
The Product is a food additive. The Product does not have any nutritional value.
You provided information about the Product and its packaging.
The label on the packaging of the Product states that it is for food purposes only.
The Product is advertised and promoted on your web site as a food additive for the sole purpose of food production.
The packaging of the Product indicates that it is packaged and marketed for retail sale.
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) Regulations 2019 section 38-3.01