Compare documents

Is the entity, a food supplier, making a GST-free supply under section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells prepared salads that are not marketed as a prepared meal?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells prepared salads that are not marketed as a prepared meal.

The entity is a food supplier. The entity is supplying various packaged, prepared salads in meal size quantities.

The salads are not marketed as a prepared meal.

The salads are not sold for consumption on the premises from which they are supplied. The salads are not hot food for consumption away from the premises.

The entity is registered for goods and services tax (GST).

A supply of food is GST-free under section 38-2 of the GST Act if it satisfies the definition of food in section 38-4 of the GST Act and it does not come within any of the exclusions in section 38-3 of the GST Act.

The meaning of food in section 38-4 of the GST Act includes food for human consumption (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act). The salads are food for human consumption. Therefore, the prepared salads fall within the meaning of food in section 38-4 of the GST Act.

However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free if it is food of a kind that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Of specific relevance is item 4 of Schedule 1 (Item 4), which provides that food marketed as a prepared meal (but not including soup) is not GST-free.

In this case, the prepared salads are not marketed as a prepared meal. Therefore, the salads are not covered by Item 4. Furthermore, the salads are not covered by any other item in Schedule 1, nor do they come within any of the other exclusions listed in section 38-3 of the GST Act. Accordingly, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells prepared salads.