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 product consisting principally of fish roe?
Decision
No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it supplies a product consisting principally of fish roe.
The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a food supplier. The entity supplies a product containing fish roe blended with other ingredients. The principal ingredient of the product is fish roe.
The entity is registered for goods and services tax (GST) and the supply satisfies the other positive limbs of section 9-5 of the GST Act.
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). The blended fish roe product 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 19 in Schedule 1 (Item 19) specifies food consisting principally of food covered by items 15 to 18 in Schedule 1. Item 17 in Schedule 1 lists caviar and similar fish roe. The principal ingredient of the product supplied by the entity is fish roe. As the entity's product consists principally of fish roe, it is covered by Item 19.
As such, the entity's supply is excluded from being GST-free by the operation of paragraph 38-3(1)(c) of the GST Act. Therefore, the entity is not making a GST-free supply under section 38-2 of the GST Act.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under any other provision of Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it supplies a product consisting principally of fish roe.