Edited version of private advice

Authorisation Number: 1052041762181

Date of advice: 31 January 2023

Ruling

Subject: GST and prepared meals

Question

Is the supply of Seafood Salad Products A and B GST-free under section 38-2 of the GST Act?

Answer

The supply of the Seafood Salad Products is not GST-free as the Seafood Salad Products are food of a kind that is marketed as a prepared meal pursuant to paragraph 38-3(1)(c) of the GST Actand item 4 in the table in clause 1 of Schedule 1 to the GST Act (Item 4). The supply of the Seafood Salad Products therefore is a taxable supply under section 9-5 of the GST Act.

Relevant facts and circumstances

You supply Seafood Salad Products A and B in commercial quantities to retailers or operators in the food services sector. The Seafood Salad Products are on your website.

Seafood Salad Products A and B are sold in a sealed plastic bag with the Seafood Salad Products placed on a Modified Atmospheric Packaging tray. Seafood Salad Products A and B are sold chilled. Seafood Salad Products A and B are generally distributed through supermarkets and displayed in the refrigerated food section. Seafood Salad Products A and B carry the directions 'serve chilled' and the description 'ready to eat'. Seafood Salad Products A and B are not designed to be resealable and are not sold with cutlery or similar utensils.

The Seafood Salad Products aresold wholesale by you and are not sold by you directly to end consumers. You list the Seafood Salad Products in catalogues and on your website. You do not undertake any other advertising or promotion of the Seafood Salad Products.

The Seafood Salad Products are sold in the fridge section of supermarkets next to products such as raw and marinated prawns, crumbed calamari, raw and marinated salmon (like cocktail prawns).

Photos of Seafood Salad Products A and B in their packaging at the time of the supply are provided. The labelling contains ingredients, nutrition information, cooking instructions and storage.

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 subsection 38-3(1)

A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-3(1)(a)

A New Tax System (Goods and Services Tax) Act 1999 paragraph 38-3(1)(b)

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 paragraph 38-4(1)(a)

A New Tax System (Goods and Services Tax) Act 1999 schedule 1 clause 1

A New Tax System (Goods and Services Tax) Act 1999 schedule 1 clause 2

A New Tax System (Goods and Services Tax) Act 1999 schedule 1 clause 3

Reasons for decision

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 the supply is not excluded from being GST-free by section 38-3 of the GST Act.

It is accepted that the Seafood Salad Products fall within the definition of food for human consumption (paragraph 38-4(1)(a) of the GST Act).

Relevantly pursuant to paragraph 38-3(1)(c) of the GST Act, food is not GST-free under section 38-2 of the GST Act if it is a supply of food of a kind specified in the third column of the table in clause 1 of Schedule 1 to 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.

Approach to food classification issues

The Federal Court (in the first instance) in Lansell House Pty Ltd v Commissioner of Taxation [2010] FCA 329 (Lansell House 2010) considered whether a product known as 'mini ciabatte' was taxable.

Sundberg J concluded at paragraphs 108 to 109 that the product was not GST-free as follows:

108. Classification decisions for sales tax, GST and VAT purposes are often described as questions of fact and degree (Ferrero at 884), value judgments (Procter & Gamble at [13]), a matter of impression (Procter & Gamble at [19]) and a combination of fact finding and evaluative judgment (Procter & Gamble at [47]). In Procter & Gamble the VAT and Duties Tribunal did not "grade" the relevant factors in coming to its decision. It stood back and took all the factors of appearance, taste, ingredients, process of manufacture, marketing and packaging together in deciding the proper classification of "Regular Pringles". The Court of Appeal approved that approach. Lord Justice Jacob said at [19]:

It was not incumbent on the Tribunal in making its multifactorial assessment not only to identify each and every aspect of similarity and dissimilarity (as this Tribunal so meticulously did) but to go on and spell out item by item how each was weighed as if it were using a real scientist's balance. In the end it was a matter of overall impression.

109. Adopting that approach, I am not persuaded that the Commissioner's classification of Mini Ciabatte as an item 32 product was wrong.

On appeal, the Full Federal Court in Lansell House Pty Ltd v Commissioner of Taxation [2011] FCAFC 6 held that the primary judge had not erred and dismissed the appellants' appeal. The Full Federal Court endorsed Sundberg J's approach to food classification. At paragraph 24 the court stated:

Where the question to be answered as to the characterisation or classification of a product is one of fact and degree, as it was for biscuits in Ferrero, Lord Wolf MR said that it is a 'perfectly satisfactory statement of the approach' to be taken to consider different characteristics of the product and, if the product has the characteristics of two categories, to place it in a category in which it has sufficient characteristics to qualify (at 885). As Jacob LJ said in Procter & Gamble at [14], this sort of question, being a matter of classification, 'is not one calling for or justifying over-elaborate, almost mind-numbing, legal analysis. It is a short practical question calling for a short practical answer'. In a case where scientific analysis does not form part of the characterisation of the product, its classification is not a scientific question.

This approach was endorsed by the Full Federal Court in Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2018] FCAFC 237 as follows at paragraph 24(2):

Secondly, subject to statutory context, function or purpose, courts should be cautious of subjecting words in legislation that have an ordinary everyday meaning to intensive analysis. Decision-makers should use "their local knowledge, experience of the world and common sense, to give a sensible interpretation" to the words used; an appellate court "required to review such decisions should endorse those that have been reached and confirmed in this way": Lansell House Pty Ltd v Federal Commissioner of Taxation [2010] FCA 329; 76 ATR 19 ("Lansell House") at [57] per Sundberg J (upheld on appeal at (2011) 190 FCR 354 per Bennett, Edmonds and Nicholas JJ); Seay v Eastwood [1976] 1 WLR 1117 ("Seay v Eastwood") at 1121 per Lord Wilberforce.

Consistent with the above approach is the leading Sales Tax decision in respect of the classification of food, by the High Court in Herbert Adams Pty Ltd v Federal Commissioner of Taxation [1932] HCA 27; 47 CLR 222. The issue in this case was whether the product at issue described as 'sponge' was 'pastry but not including cakes or biscuits'. The taxpayer sought to argue that with reference to the trade meaning, sponge was a pastry and not a cake. The High Court in finding for the Commissioner, accepted the ordinary meaning of cake which included sponge.

Evatt J at pages 229-230 said:

Samples of the appellant's manufacture were produced, and in my opinion the goods made were undoubtedly "cakes." According to the Oxford Dictionary a "sponge" is "a very light sweet cake made with flour, milk, eggs and sugar." A dictionary reference may not be necessary. Perhaps this is one of the few things that every schoolboy knows.

What is required in food classification cases, as the courts inform us, is a common sense, practical approach to form an overall impression. Not an overly pedantic, highly legal or scientific analysis.

Marketing in a GST context

The Federal Court decision of Cascade Brewery Company Pty Limited v Commissioner of Taxation [2006] FCA 821; 2006 ATC 4339 (Cascade) considered marketing in a GST context. Specifically, whether Ultra-C (the product at issue) was 'marketed principally as food for infants or invalids' so that it would fall within Item 13 of Schedule 2 and be classified as GST-free.

It is perhaps worth noting that the use of 'principally' in Schedules 1 and 2 creates a higher test as it is included as an additional qualifier. Item 4 of Schedule 1 is not qualified by the use of 'principally' therefore a lesser standard in terms of the level of marketing activity is required.

In respect of 'marketing' Sundberg J had this to say at paragraphs 11, and 23 to 24:

11. The words "marketed principally as food for infants" in item 13 require an examination of the content of the advertising and other marketing in fact carried out either by the taxpayer or by competitors in the market. The witnesses to whom I have referred spoke somewhat generally about their aims and hopes in respect of the marketing. The relevant findings at [9] are based on the content of the marketing, that is to say, on what a reader of the labels, the Bounty bag brochure and the print advertisements or a viewer of the television advertisements would derive from them. The findings do not entirely accord with the witnesses' evidence about Cascade's aims. That evidence seems to me to have been subconsciously influenced by the existence of item 13 and the purpose of the litigation.

23. I have referred at [11] to one aspect of the word "marketed", about which the parties did not make submissions. Otherwise there does not appear to be any significant difference between their positions on the meaning of the expression "marketed principally". Cascade adopted the approach published by the Commissioner in SST11 - Sales tax: a guide to the classification of goods under the sales tax law (SST11):

"Marketing principally means the most important or the most significant of all the ways in which the product is marketed. Marketing involves an examination of the activities of the sellers of the relevant goods."

The document goes on to say that consideration may be given to the name of the goods, their price, the labelling on any containers, literature or instructions accompanying the goods, how they are packaged, how they are promoted or advertised, and how they are distributed.

24. This approach is consistent with the dictionary meanings of "marketing". Thus The Macquarie Dictionary refers to "the total process whereby goods are put onto the market". The Australian Oxford Dictionary refers to "the action or business of promoting and selling products, including market research and advertising".

Food marketed as a prepared meal

Relevant to paragraph 38-3(1)(c) of the GST Act and the Product, is the category of 'Prepared food' in Schedule 1 and more specifically, Item 4 which is:

food marketed as a prepared meal, but not including soup

Relevant to prepared food and meals, are clauses 2 and 3 of Schedule 1 which state:

2 Prepared food, bakery products and biscuit goods

For the purpose of determining whether particular food is covered by any of the items in the table relating to the category of prepared food, bakery products or biscuit goods, it does not matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to consumption.

3 Prepared meals

Item 4 in the table only applies to food that requires refrigeration or freezing for its storage.

The Seafood Salad Products require refrigeration for its storage, the Seafood Salad Products' cooking instruction is 'Ready to eat, serve chilled'. Product A is displayed at Woolworths refrigerated seafood section. Product B also requires refrigeration for its storage. As such, Clause 2 and clause 3 of Schedule 1 are satisfied, and they do not preclude the Seafood Salad Products from being covered by Item 4.

As such, it is necessary to consider whether the Seafood Salad Products are food 'of a kind' that is marketed as a prepared meal.

Meaning 'of a kind'

The phrase 'of a kind' is not defined in the GST Act. Accordingly, it is appropriate to examine the ordinary meaning of that term. The Macquarie Dictionary online, www.macquariedictionary.com.au, accessed 9 September 2022 (The Macquarie Dictionary), does not define the entire phrase 'of a kind' however, it defines the word 'kind' to mean:

noun 1. a class or group of individuals of the same nature or character, especially a natural group of animals or plants.

2. nature or character as determining likeness or difference between things: things differing in degree rather than in kind.

3. a person or thing as being of a particular character or class: he is a strange kind of hero.

The phrase 'of a kind' has been the subject of judicial consideration in a number of cases in respect of the different legislative provisions.

In Lansell House 2010, Sundberg J reviewed the relevant authorities, including Air International Pty Ltd v Chief Executive Officer of Customs [2002] FCA 355; 121 FCR 149, and stated at [19]:

If the intention had been simply to exclude the items in the table in the schedule, Parliament would have used the words "food specified in the third column". What then does "of a kind" add? In Air International the Full Court was concerned with a classification of goods under tariff subheadings in Schedule 3 of the Customs Tariff Act 1995 (Cth) - goods "of a kind used as replacement components in passenger motor vehicles". Tamberlin J, with whom O'Loughlin J agreed, said at [53]:

It is helpful to look at actual use, if any, when deciding whether goods are of a kind used as replacement components. Where they are so used, then that points to a conclusion that they are "of a kind" so used. The words "of a kind" add a further level of generality to the expression "used" so that even if (to use the Tribunal's expression) the goods are not so used but are within a range of goods of a type which are used, then they satisfy the required description.

...

The description can apply where there is no actual use of a good as a replacement component if the goods are of that genus. That is to say they are of the same type of component which is used to replace components of passenger motor vehicles. The genus, in my view, is a relatively broad one and the word "kind" should be so construed.

Ultimately, Sundberg J found that the mini ciabatte was a 'cracker', and thus was not GST-free. His Honour did not need to rely on the product falling within the broader description of 'of a kind'.

Sundberg J also noted, at [20], that the same approach was taken in Customs and Excise Commissioners v Mechanical Services Ltd [1979] 1 WLR 305, a value added tax case. The question in that case was whether the particular goods fell to be classified as 'Goods of a kind suitable for use as parts of goods within item 1 or item 5'. At [316] Megaw LJ said:

Presumably the three words 'of a kind' have not been introduced merely for elegance of prosody or to provide meaningless padding. They do affect the meaning. It is not 'the goods' - the particular articles, here the couplings and the winch - which have to be suitable for use as parts. It is the kind of goods to which those particular articles belong, their genus, which has to be thus suitable. The addition of 'of a kind' would be meaningless if goods which are themselves suitable are necessarily also goods of a kind which is suitable.

In Lansell House Pty Ltd v Commissioner of Taxation [2011] FCAFC 6, the Full Federal Court was satisfied that the mini ciabatta was 'of a kind' of the cracker genus, after taking into account the characteristics of the product as set out by Sundberg J in Lansell House 2010. The Full Federal Court held at [30] that:

The phrase "of a kind" has been defined by the Oxford English Dictionary (online edition, Oxford University Press, 2010) as "of the same sort, not a typical or perfect specimen of the class". The word "kind" is appropriately used to denote a genus, class or description (Commonwealth of Australia v Spaul (1987) 74 ALR 513 at 516 per Davies, Lockhart and Neaves JJ). The word "kind" is appropriately used to denote a genus, class or description (Commonwealth of Australia v Spaul (1987) 74 ALR 513 at 516 per Davies, Lockhart and Neaves JJ). The use of the words "of a kind" in s 38-3(1)(c) of the GST Act adds further generality to the description of the items described in Schedule 1: Air International Pty Ltd v Chief Executive Officer of Customs (2002) 121 FCR 149 per Hill J. Thus, a new product that does not possess all of the same characteristics of known crackers may nevertheless be within the relevant item...The question is whether the resulting product comes within the genus, class or description of a cracker.

In Cascade, Sundberg J, in the course of determining the meaning of the phrase 'of a kind' in the context of whether a beverage was 'of a kind marketed principally as food for infant', reviewed the authorities including Hygienic Lily Ltd v Commissioner of Taxation [1987] FCA 155; 13 FCR 396 (Hygienic Lily), being one of the authorities upon which the Commissioner relied in his submissions. In Hygienic Lily Gummow J, in relation to the question of whether waxed paper cups used by McDonald's Restaurants were 'goods of a kind ordinarily used for household purposes', stated, at 399:

... the setting in which the phrase "goods of a kind" appears suggests it is directed not to the use for which the particular goods in question were designed or manufactured, nor to the purpose to which it is intended those particular goods shall be put, but rather to the nature, quality and adaptation of goods in the class or genus in question. Thus, goods are "of a kind ordinarily used for household purposes" if they are to be recognised as members of a class or genus which commonly or regularly (albeit not necessarily exclusively or principally) is used for household purposes; cf. Customs and Excise Commissioner v Mechanical Services Ltd [1979] 1 WLR 305 at 312-313, 315, 316-317.

Accordingly, it is considered that food will be 'food of a kind' listed in Schedule 1 if it is food belonging to the same class, genus or description as the food listed in Schedule 1.

Meaning of 'prepared meal'

While the test for item 4 is whether a product is 'of a kind' of food marketedas a prepared meal, it is important to consider what a prepared meal is.

The term 'prepared meal' is not defined in the GST Act therefore it takes its ordinary meaning informed by the legislative context.

In the context of food, 'prepare' is defined in The Macquarie Dictionary as:

Verb 2. To get ready for eating, as a meal, by due assembling, dressing or cooking.

and 'meal' as:

Noun 1. One of the regular repasts of the day, as breakfast, lunch, or dinner.

2. The food eaten or served for a repast.

Essentially therefore, a prepared meal would be a 'repast ready for eating'.

The ordinary meaning of 'meal' does not impose requirements with regard to pricing, composition or nutritional value, leaving a wide range of food that could potentially qualify as a meal. Further, the size of the product in and of itself will not dictate whether it will fall within item 4. Treating that factor as determinative is akin to reading in an additional word 'main' into the item such that it would otherwise read 'marketed as a prepared main meal', which is considered inappropriate and not an intended application of the law.

A prepared meal, as ordinarily understood may be, for example: large or small; substantial or modest, contain any number of kilojoules; be high or low in fats, protein or carbohydrates; contain meat or be vegetarian; or be gluten-free. Neither the quantity nor the quality of the meal is of importance, nor is it necessary that it should be served at any particular time or in any particular place. Meals as ordinarily understood, are simply a function of individual taste, culture, health requirements and appetite. The meaning does not require any scientific or dietary analysis.

The Seafood Salad Products would be within the meaning of this broad description as the Seafood Salad Products are food that are already prepared ready for eating. That is, the Seafood Salad Products are supplied as a prepared meal as ordinarily understood. This definition could be applied to a single food item or to a meal consisting of several food items.

Food marketed as a prepared meal

The ATO view on prepared meal is provided in the Food Industry Partnership - Issue Register - Issue 5, which deals with the interpretation and application of Item 4 as follows:

Issue 5 ...

What is a prepared meal?

Clause 1, Item 4 of Schedule 1 of the GST Act operates to subject the following to GST:

'food marketed as a prepared meal, but not including soup'. The Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 ('the EM') provides that the term 'prepared meal' is intended to cover a range of food products that:

•                     directly compete against take-aways and restaurants

•                     require refrigeration or freezing for storage (clause 3 of Schedule 1); and

•                     are marketed as a 'prepared meal'.

Directly compete against take-aways and restaurants

The Further Supplementary Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 (the EM) explains at paragraph 1.31 that 'the category of "prepared food" ... is intended to cover a range of food products that directly compete against take-aways and restaurants. These products will always be taxable'.

Paragraph 1.33 of the EM provides examples of food that is considered food marketed as a prepared meal:

1.33 New item 4 of new Schedule 1A includes in the category of prepared food, food marketed as a prepared meal but not including soup. This item will cover things such as:

•                     prepared meals, such as curry and rice dishes, mornays and similar dishes sold cold by a takeaway or supermarket that only need reheating to be ready for consumption

•                     fresh or frozen prepared lasagne

•                     sushi

•                     cooked pasta dishes sold complete with sauce

•                     frozen TV dinners; and

•                     fresh or frozen complete meals (eg. single serves of a roast dinner including vegetables and low fat dietary meals).

While the EM does not displace the meaning of the statutory text, it can be used to aid its interpretation (Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 2012 ATC 20-361 at [39]).

It is clear from the definitions of 'prepare' and the examples provided in the EM that 'prepared food' is food that has been subject to some form of process, such as assembly of ingredients or cooking in order to make it effectively ready for consumption as a meal.

The Seafood Salad Products are supplied ready for consumption as consumers can peel off the cover and eat from the container. The Seafood Salad Products are marketed as a prepared dish ('ready-to-eat') and are reasonable alternatives to prepared meals offered by takeaways or restaurants.

We consider the Seafood Salad Products compete with products sold in take-aways and restaurants.

The Seafood Salad Products are sold wholesale in commercial quantities to retailers or operators in the food services sector and are not sold by you directly to end consumers. However, the Seafood Salad Products are sold in their packages of Z grams which are a retailed form. They are competing against similar products sold in take-aways and restaurants.

Requires refrigeration or freezing for storage

As stated above, the Seafood Salad Products require refrigeration for their storage and therefore meet the requirement of clause 2 of Schedule 1 to the GST Act.

Seafood Salad Products A and B are generally distributed through supermarkets and displayed in the refrigerated food section. Seafood Salad Products A and B carry the directions "serve chilled" and the description 'ready to eat'

Marketed as a prepared meal

Item 4 contains a marketing test, therefore we need to determine if the Seafood Salad Products were in fact marketed as a prepared meal.

As confirmed by Sundberg J in Cascade, consideration must be given to your total process in promoting and selling the Seafood Salad Product. These include:

•                     the name of the goods

•                     the price of the goods

•                     the labelling on any containers for the goods

•                     literature or instructions packed with the goods

•                     how the goods are packaged

•                     how the goods are promoted or advertised

•                     how the goods are distributed.

Name of the products

The name of the Seafood Salad Product is X. The name identifies the Seafood Salad Products as a salad containing multiple ingredients. Further, the name of the Seafood Salad Product conveys to the consumer that this is a salad of which ingredients have been prepared, cooked and dressed.

We consider that the name of the Seafood Salad Product indicates to the consumer that the Product is capable of being a meal and is ready for consumption.

Price of the products

The wholesale price for the Seafood Salad ProductsA and B are substantially similar at around $Y per kg. this price is irrelevant since it is not the price paid by end consumers.

The Retailed Price of the Seafood Salad Products are given. We consider that since you sell the products in the form of Z grams, a customer may opt for the Seafood Salad Products especially if they are cheaper than similar products sold by takeaways or restaurants. We consider that the prices of the Seafood Salad Products are set at the current level in order to attract buyers that may otherwise buy similar products from takeaways or restaurants.

We found that at the retail level, the pricing point of the Seafood Salad Products are comparable to the pricing point of other products that are food of a kind marketed as a prepared meal.

Labelling on the packaging of the products

The packaging is clear, see-through plastic on both the front and the back.

The front of the packaging of Seafood Salad Products contains a photo of the Product A in a bowl.

The back of the packaging of Seafood Salad Product A contains the nutrition table, the ingredients, and the cooking instructions and storage instructions.

The labelling indicates that the Seafood Salad Products include a variety of ingredients such as protein, carbohydrates and vegetables that have been prepared or cooked, seasoned and dressed in a sauce.

The information on the label considered together with the phrase 'ready to eat' indicate that the Seafood Salad Products are promoted to customers as prepared meals.

Literature or instructions accompanying the products

You list the Seafood Salad Products in your catalogue and on your website. You do not undertake any other advertising or promotion of the Seafood Salad Products.

We consider the following to be relevant:

•                     There is a photo of a bowl of the Seafood Salad Products and the words 'Ready to eat' on the labelling of the Seafood Salad Products, which indicates the Seafood Salad Products can be eaten on their own. The phrase 'ready to eat' on the packaging of the Seafood Salad Products suggest that the Seafood Salad Products are prepared and ready for consumption, as the ingredients are cooked, seasoned and dressed. Whilst this factor on its own is not determinative of a product being marketed as a prepared meal, it is a strong indicator. A product that is already cooked, seasoned and dressed is 'prepared'.

•                     The Seafood Salad Products being Z grams are also a similar size to products sold in the prepared meals area of supermarkets.

The literature or instructions accompanying the Seafood Salad Products suggest that the Seafood Salad Products are prepared meals that are ready to eat.

How the products are packaged

The packaging is a clear transparent material, which assists the consumers to check out the contents and ingredients of the Seafood Salad Products for buying purposes. We consider that the Seafood Salad Products can be eaten from the container. The Seafood Salad Products are duly assembled, ready for eating, consumers only need to peel the cover before consumption. Further, whether the Seafood Salad Products are packaged in a container that consumers can eat out of, is not a determinative factor.

Whilst the provision of cutlery and serviettes would facilitate the immediate consumption of the Seafood Salad Products, the lack of it does not exclude the Seafood Salad Products from being prepared meals.

Promotion and advertising of the products

We consider while the marketing activities of the supplier are relevant, this is not the sole determinative factor. That is, a lack of promotional or advertising activities by the supplier (in this case a wholesaler) does not result in the product not being marketed as a prepared meal. As confirmed in Cascade, how a product is marketed is determined by the total process whereby goods are put onto the market. As such the activities of the manufacturer or wholesalers as well as retailers are relevant as they are essentially selling the same product and therefore all the marketing is relevant to determine if the product is put to the market as being a prepared meal.

This is supported by Lansell House 2010, where the Full Federal Court held at [30] that the use of the words 'of a kind' in paragraph 38-3(1)(c) of the GST Act should not be construed narrowly and that the question is whether the product being considered comes within the genus, class or description of an item described in Schedule 1.

We also consider that the Seafood Salad Products are promoted as XXX,which include a variety of ingredients such as protein, carbohydrates and vegetables that have been prepared or cooked, seasoned and dressed with a sauce. This is consistent with your website that advertises the Seafood Salad Products as a meal.

Distribution

As stated above, while the marketing activities of the supplier are relevant, this is not the sole determinative factor.

It is relevant in the current case that the Seafood Salad Products are sold by you to supermarkets in retailed packaging of Z grams. In addition, the photos of the Seafood Salad Products show that the Seafood Salad Products are sold in the same package by supermarkets to end consumers.

The Seafood Salad Products contain multiple ingredients from the different food groups, such as protein, carbohydrates and vegetables, that have been cooked and prepared, seasoned and mixed with a dressing and are promoted on your website as a meal.

The placement of the Seafood Salad Products alongside GST-free products do not prevent the Seafood Salad Products from falling within the genus or class of what is generally understood to be food marketed as a prepared meal.

Our Conclusion

In summary, the following factors contribute towards the overall impression that the Seafood Salad Products are food marketed as a prepared meal or 'of a kind' of food that is marketed as a prepared meal under Item 4:

•                     The name identifies the Seafood Salad Products as containing multiple ingredients that is prepared and ready to eat. The Seafood Salad Products are promoted on your website as a meal. The phrase 'ready to eat' on the packaging of the Seafood Salad Products suggests that the Seafood Salad Products are prepared and ready for consumption, as the ingredients are cooked, seasoned and dressed.

•                     The labelling on the packaging shows the Seafood Salad Products contain multiple prepared or cooked ingredients from the different food groups, such as protein, carbohydrates and vegetables that have been prepared or cooked, seasoned and dressed with a sauce. There is a photo of a bowl containing the Seafood Salad Products on the labelling of the Seafood Salad Products, which indicates the Seafood Salad Products can be eaten on their own.

•                     The Seafood Salad Products are assembled and dressed ready for consumption.

•                     Although not a decisive factor, the packaging of the Seafood Salad Product shows that the Seafood Salad Product can be eaten from the container. The Seafood Salad Products being Z grams are also a similar size to products sold in Woolworths prepared meals area that would fall under Item 4. The photos of the Seafood Salad Products show that the Seafood Salad Products are sold in the same packages by supermarkets to end consumers.

•                     The Seafood Salad Products are ready for consumption and compete with prepared meals sold in take-aways and restaurants.

•                     The packaging is a clear transparent material, which assists the consumers to check out the contents and ingredients of the Seafood Salad Products for buying purposes. We consider that the Seafood Salad Products can be eaten from the container. The Seafood Salad Products are duly assembled, ready for eating, consumers only need to peel the cover before consumption.

Please note that the description 'ready to eat' on the labelling of the package of the Seafood Salad Products is only one of the factors that are considered in reaching the decision that the Seafood Salad Products are marketed as prepared meals. No single factor is determinative in analysing the characteristics and classifications of the Seafood Salad Products, it is the overall impression which determine their classifications.

Therefore, the Seafood Salad Products are excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act. It follows that the supply of the Seafood Salad Products is not GST-free. The supply of the Seafood Salad Products is a taxable supply under section 9-5 of the GST Act.