Issue
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 crumpets?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells crumpets.
Facts
The entity is a food supplier. The entity supplies crumpets.
The crumpets are not supplied for consumption on the premises from which they are supplied. The entity does not supply the crumpets as hot food for consumption away from those premises.
The entity is registered for goods and services tax (GST).
Reasons for Decision
A supply of food is GST-free under section 38-2 of the GST Act provided that it does not come within any of the exclusions listed in section 38-3 of the GST Act.
Food is defined in paragraph 38-4(1)(a) of the GST Act to include food for human consumption (whether or not requiring processing or treatment). Crumpets are considered to be food for human consumption.
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). Crumpets are not specifically listed in Schedule 1, nor are they food of a kind specified in Schedule 1.
In addition, the supply of crumpets 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 of crumpets under section 38-2 of the GST Act.