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 a fresh fruit and vegetable juice drink?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies a fresh fruit and vegetable juice drink.
Facts
The entity is a food supplier. The entity is supplying a fresh fruit and vegetable juice drink that contains more than 90% of juices of fruits or vegetables by volume. The fresh fruit and vegetable juice drink is non-alcoholic, non-carbonated and not consumed on the premises from which it is supplied.
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 beverages for human consumption (paragraph 38-4(1)(c) of the GST Act). Fresh fruit and vegetable juice drink is a beverage for human consumption.
However, under paragraph 38-3(1)(d) of the GST Act, beverages are only GST-free if they are specified in the table in clause 1 of Schedule 2 to the GST Act (Schedule 2).
Item 12 in Schedule 2 (Item 12) lists non-alcoholic non-carbonated beverages, if they consist of at least 90% of juices of fruits or vegetables by volume.
The fresh fruit and vegetable juice drink is non-alcoholic, non-carbonated and consists of at least 90% of juices of fruits or vegetables by volume. Therefore, the product is covered by Item 12.
Furthermore, as the fresh fruit and vegetable juice drink is not consumed on the premises from which it is supplied, the supply is not excluded from being GST-free under paragraph 38-3(1)(a) of the GST Act; nor is the supply excluded from being GST-free under any other of the paragraphs 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 the fresh fruit and vegetable juice drink.