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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 supplies a blended raw nut product?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies a blended raw nut product.

The entity is a food supplier. The entity supplies a blended raw nut product.

The blended raw nut product is achieved by mixing and blending raw materials. The raw materials have not been processed or treated by salting, spicing, smoking or roasting, or processed or treated in any other similar way. The blended raw nut product is to be used as a meal replacement. It is not to be cooked or heated and it is to be added to milk, water, fruit juice, yoghurt, fruit salad, ice-cream or any cold food or drink.

The blended raw nut product is food for human consumption.

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 is not excluded by section 38-3 of the GST Act.

Food is defined in section 38-4 of the GST Act to include food for human consumption (paragraph 38-4(1)(a) of the GST Act). The blended raw nut product is food for human consumption, and therefore, satisfies the definition of food contained in paragraph 38-4(1)(a) of the GST Act.

However, paragraph 38-3(1)(c) of the GST Act provides that a supply of food is not GST-free if: • it is food of a kind specified in 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 which is food of such a kind.

Item 16 of Schedule 1 (Item 16) lists seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or 'in any other similar way'.

In this case, the nuts in the blended raw nut product are raw and have not been processed or treated by salting, spicing, smoking or roasting, or processed or treated in any other similar way. Therefore, the blended raw nut product is not covered by Item 16; nor is it covered by any of the other items in the table in Schedule 1. Accordingly, the supply of the blended raw nut product is not excluded from being GST-free under paragraph 38-3(1)(c) of the GST Act.

In addition, the supply of the blended raw nut product does not fall within any of the other exclusions in section 38-3 of the GST Act. Therefore, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies the blended raw nut product.