GST and savoury steamed buns

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 savoury steamed buns?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it sells savoury steamed buns.

The entity is a food supplier. The entity sells savoury steamed buns. The ingredients of the bun are wheat flour, vegetable oil, cabbage, leak, soybean protein, onion, garlic and pepper. The cooking directions suggest cooking the product for about 3 minutes in the microwave oven.

The product is not sold hot and is not for consumption on the premises from which it is 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 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). Savoury steamed buns are 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 specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1).

Of most relevance to this case is item 27 in Schedule 1 (Item 27), which lists 'bread (including buns) with a sweet filling or coating'.

The ingredients of the buns are wheat flour, vegetable oil, cabbage, leak, soybean protein, onion, garlic and pepper. The savoury steamed buns have no sweet filling or coating. As such they do not fall under Item 27 and the buns are not excluded from being a GST-free supply by paragraph 38-3(1)(c) of the GST Act.

In addition, the supply of the savoury steamed buns 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 savoury steamed buns.