GST and chicken sausage roll

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 sells chicken sausage rolls?

No, the entity is not making a GST-free supply under section 38-2 of the GST Act when it sells chicken sausage rolls. The entity is making a taxable supply under section 9-5 of the GST Act.

The entity is a food supplier. The entity supplies uncooked frozen chicken sausage rolls.

The chicken sausage roll consists of raw minced chicken meat (plus salt, herbs, and spices) that is rolled up and wrapped in a sheet of puff pastry. Both ends of the chicken sausage roll are open with the chicken meat filling visible.

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.

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). Chicken sausage rolls are food for human consumption and therefore, satisfies the definition of food in paragraph 38-4(1)(a) of the GST Act.

However, under paragraph 38-3(1)(c) of the GST Act, a supply of food is not GST-free, if it is a food of a kind specified in the table in clause 1 of Schedule 1 to the GST Act (Schedule 1).

Item 22 in Schedule 1 (Item 22) lists 'pies (meat, vegetable or fruit), pasties and sausage rolls'.

The chicken sausage roll consists of raw minced chicken meat (plus salt, herbs, and spices) that is rolled up and wrapped in a sheet of puff pastry. Both ends of the chicken sausage roll are open with the chicken meat filling visible. As such, the chicken sausage roll is a kind of sausage roll. Therefore, the chicken sausage roll is covered by Item 22 and is excluded from being GST-free by paragraph 38-3(1)(c) 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 chicken sausage rolls.