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 pease pudding?
Decision
Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies pease pudding.
Facts
The entity is a food supplier. The entity supplies pease pudding.
Pease pudding is presented in a small tin ready for retail sale and is described as tinned vegetables (ready cooked). The pease pudding can be served hot with boiled meat or served hot or cold with any meat or fish.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Section 38-2 of the GST Act provides that a supply of food is GST-free 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). Pease pudding is food for human consumption and therefore, satisfies 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 that is specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1).
Item 4 of Schedule 1 (Item 4) lists food that is marketed as a prepared meal, but not including soup. However, clause 3 of Schedule 1 provides that Item 4 only applies to food that requires refrigeration or freezing for its storage.
While the pease pudding is described as ready cooked vegetables, the pease pudding is presented in a small tin ready for retail sale and does not require any refrigeration or freezing to maintain its storage. As such, pease pudding is not covered by Item 4 and the excluding provisions of paragraph 38-3(1)(c) of the GST Act do not apply.
In addition, the supply of the pease pudding 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 pease pudding.