GST and salad products supplied in a jar

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 a jar of salad products, containing meat, vegetables and pasta, that does not require refrigeration or freezing for its storage?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies a jar of salad products, containing meat, vegetables and pasta, that does not require refrigeration or freezing for its storage.

The entity is a food supplier. The entity sells salad products in a jar. The salads are sold ready to eat and contain a variety of ingredients including meat, vegetables and pasta.

When supplied, the salads do not require refrigeration or freezing for their storage.

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 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 (whether or not requiring processing or treatment) (paragraph 38-4(1)(a) of the GST Act).

The salad products supplied in a jar are food for human consumption in accordance with paragraph 38-4(1)(a) of the GST Act.

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), or is food that is a combination of one or more foods at least one of which is food of a kind specified in Schedule 1.

The only item of relevance in this case, is item 4 in Schedule 1 (Item 4), which lists 'food marketed as a prepared meal, but not including soup'. Clause 3 of Schedule 1 states that Item 4 only applies to food that requires refrigeration or freezing for its storage. Although the entity is supplying salad products that are ready for consumption when sold (and therefore are arguably a 'prepared meal'), the salad products do not require refrigeration or freezing for their storage. Therefore, the salad products are excluded from the scope of Item 4. In addition, the salad products are not covered by any other items in Schedule 1, nor do they contain any foods that are covered by the items in Schedule 1. Accordingly, the supply of the salad products in a jar is not excluded from being GST-free by paragraph 38-3(1)(c) of the GST Act.

Furthermore, the supply of the salad products does not fall within any of the other exclusions in section 38-3 of the GST Act. Accordingly, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies a jar of salad products, containing meat, vegetables and pasta, that does not require refrigeration or freezing for its storage.