GST and canned boiled nuts

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 canned boiled nuts?

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

The entity is a food supplier. The entity supplies canned boiled nuts.

The canned boiled nuts do not require further cooking before being eaten and are often used in stir-fried dishes.

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). Canned boiled nuts are food for human consumption and therefore satisfy the definition of food in paragraph 38-4(1)(a) of the GST Act.

However, paragraph 38-3(1)(c) of the GST Act provides that 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).

Item 16 of Schedule 1 (Item 16) specifies that seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way are not GST-free. Boiled nuts are not considered to have been processed or treated in a way similar to the processes listed in Item 16 and are therefore not covered by this item. Accordingly, the excluding provisions of paragraph 38-3(1)(c) of the GST Act do not apply.

In addition, the supply of canned boiled nuts 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 canned boiled nuts.