GST and pancake mix

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 pancake mix?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies pancake mix.

The entity is a food supplier. The entity supplies pancake mix.

The pancake mix is uncooked and consists of dry powdered ingredients. Milk or water is added to the pancake mix and the mixture is then cooked to make pancakes.

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 ingredients for food for human consumption (paragraph 38-4(1)(b) of the GST Act). The pancake mix consists of dry powdered ingredients to which water or milk is added. The pancake mixture is then cooked to produce pancakes. Accordingly, the pancake mix is an ingredient for food for human consumption and, therefore, satisfies the definition of food in paragraph 38-4(1)(b) of the GST Act.

However, paragraph 38-3(1)(c) provides that a supply of food is not GST-free if it is of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1). Pancake mix is not a food of a kind listed in Schedule 1.

In addition, pancake mix 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 pancake mix.