GST and supply of sachets of soy sauce and wasabi

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 condiments such as sachets of soy sauce and wasabi?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies condiments such as sachets of soy sauce and wasabi.

The entity is a food supplier. The entity supplies condiments such as sachets of soy sauce and wasabi.

The entity supplies the condiments as seasoning to be added to food after preparation.

The condiments are not sold for consumption on the premises from which they are 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 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 goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings) (paragraph 38-4(1)(e) of the GST Act). The condiments are supplied as seasoning to be added to food after preparation. Therefore, they are goods to be mixed with or added to 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). Condiments such as soy sauce and wasabi do not fall under any item in Schedule 1.

The condiments are not sold for consumption on the premises from which they are supplied. In addition, condiments such as soy sauce and wasabi 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 condiments such as sachets of soy sauce and wasabi.