GST and unfilled tartlet shells

[History note: This ATO ID was amended on 26 March 2002 to remove the word 'savoury' from the term 'savoury tartlet' wherever it appeared. The ATO ID applies to unfilled tartlet shells to be used for either sweet or savoury fillings.]

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 unfilled tartlet shells?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells unfilled tartlet shells.

The entity is a food supplier. The entity is selling unfilled tartlet shells. Tartlet shells are made from pastry and are designed to be filled with sweet or savoury fillings.

The unfilled tartlet shells are not supplied for consumption on the premises from which they are supplied.

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 paragraph 38-4(1)(b) of the GST Act to include 'ingredients for food for human consumption'. Unfilled tartlet shells satisfy the definition of food because they are ingredients for food for human consumption.

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 that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). The category of food from Schedule 1 that is of particular relevance is 'Bakery products'.

Item 23 in Schedule 1, from the category 'Bakery products', specifies that tarts and pastries are not GST-free. Therefore, the issue is whether tartlet shells are considered to be tarts or pastries.

The words 'tarts' and 'pastries' are not defined in the GST Act; therefore it is necessary to consider the ordinary meanings of those terms. The Macquarie Dictionary (1997) defines 'tart' as 'a small and saucer-shaped shell of pastry, filled with cooked fruit or other sweetened preparation, and having no top crust.' 'Pastry' is defined as '1. Food made of paste or dough, as the crust of pies, etc. 2. Articles of food of which such paste forms an essential part, as pies, tarts, etc.'

Therefore, it is necessary to determine whether the reference to 'pastry', in Item 23, should be interpreted to mean 'food made of paste or dough, as the crust of pies'; or whether the interpretation of the word 'pastry' should be confined to 'articles of food of which such paste forms an essential part, as pies, tarts, etc'.

An accepted principle of statutory interpretation (the noscitur a sociis rule) provides that words take their meaning from the words with which they are associated ( Fox v. Warde [1978] VR 362: Supreme Court of Victoria). As such, the meaning of the word 'pastry' can be derived from the context of the surrounding words used in Item 23.

Item 23 lists 'tarts and pastries'. The definition of the word 'tart' explains that a tart must consist of a pastry shell and a filling. Therefore, although the word 'pastry' can mean food made of paste or dough such as a pie crust without a filling, it is considered that its close association to the word 'tart' restricts the meaning of 'pastry' to food of which such paste forms a part, but which also contains a filling such as a pie or a tart.

Although a tartlet shell is made of pastry, it is does not contain any filling and therefore, is not considered to be food of a kind that is described as a 'tart' or a 'pastry' in Item 23.

As such, Schedule 1 does not exclude an unfilled tartlet shell from being GST-free. In addition, the supply in this case 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 sells unfilled tartlet shells.