Edited version of private advice

Authorisation Number: 1052330233822

Date of advice: 25 November 2024

Ruling

Subject: GST and food classification

Question 1

Is the supply of Product 1 GST free pursuant to 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 Product 1 is GST-free under section 38-2 of the GST Act because:

•         Product 1 satisfies the definition of food in paragraph 38-4(1)(e) of the GST Act being "goods to be mixed with or added to food for human consumption" and

•         the supply of Product 1 does not fall within any exclusions in section 38-3 of the GST Act.

Question 2

Is the supply of Product 2 GST free pursuant to 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 Product 2 is GST-free under section 38-2 of the GST Act because:

•         Product 2 satisfies the definition of food in paragraph 38-4(1)(e) of the GST Act being "goods to be mixed with or added to food for human consumption" and

•         the supply of Product 2 does not fall within any exclusions in section 38-3 of the GST Act.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You are an Australian entity and are registered for GST.

You provided a key marketing brochure when presenting to clients/potential clients about Product 1 and Product 2.

Product 1

You supply the Product in bulk packaging to food manufacturers.

Product 1 is made from a food ingredient.

You do not market Product 1 for retail sale. However, you intend to sell Product 1 to independent food ingredient distributors and to other food manufacturers.

You provided the manufacturing process of Product 1

You provided a sample of Product 1.

Product 1 is essential to the composition of food as a food ingredient.

Product 2

You supply the Product in bulk packaging to food manufacturers.

Product 2 is made from a combination of food ingredients.

You do not market Product 2 for retail sale. However, you intend to sell Product 2 to independent food ingredient distributors and to other food manufacturers.

You provided the manufacturing process of Product 2.

You provided a sample of Product 2.

Product 2 is essential to the composition of food as a food ingredient.

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 paragraph 38-4(1)(e)