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 supplies baguettes?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies baguettes.
Facts
The entity is a food supplier.
The entity supplies uncooked frozen baguettes. The baguettes are a type of long thin bread roll, that do not have a sweet filling or coating.
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 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.
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). Baguettes are a type of bread stick or long bread roll. Baguettes are food for human consumption and, therefore, satisfy the definition of food 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). Baguettes are not food of a kind listed in Schedule 1.
In addition, the baguettes do 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 baguettes.