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Edited version of private advice
Authorisation Number: 1052162365002
Date of advice: 26 September 2023
Ruling
Subject: GST and supply of raw cacao
Question
Is the supply of the raw cacao (the Product) GST 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 Product is GST-free under section 38-2 of the GST Act because:
• the Product is an ingredient for beverages for human consumption and therefore satisfies the definition of food in paragraph 38-4(1)(d) of the GST Act, and
• the Product is of a kind listed in item 8 of the table in clause 1 of Schedule 2 to the GST Act, hence, it is not excluded from being GST-free by section 38-3 of the GST Act.
This private ruling applies for the following period:
26 September 20XX to 25 September 20XX
Relevant facts and circumstances
You sell the Product in Australia.
You are registered for GST.
The Product is 100% raw cacao. It comes in different package sizes.
The Product's appearance is like granulated chocolate, or cacao nibs, there is nothing added to it. The texture is waxy and grainy and tastes earthy, nutty and resembles cocoa.
The Product is used to make a drink by adding a sweetener, milk, hot water and blending before consumption, similar to coffee.
You provided your website address and social media accounts where the Product is advertised.
The Product is predominantly sold in Australia via your website and in health food stores and gourmet grocers.
If sold in a supermarket, the Product is placed in the health food section, close to raw cacao powders.
You provided pictures of the packaging of the Product as well as a sample of the Product in its packaging.
Your website includes the following information:
• The Product is a coffee alternative.
• On your website, a medium size bag is sold for $XX while a large size bag is sold for $YY.
• Feedback from your customers show that they use the product as a coffee alternative.
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) Act 1999 Schedule 2.