GST and glutinous rice balls with sweet filling

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 glutinous rice balls with sweet filling?

Yes, the entity is making a GST-free supply under section 38-2 of the GST Act when it supplies glutinous rice balls with sweet filling.

The entity is a food supplier. The entity supplies glutinous rice balls with sweet filling. The ingredients of the rice balls are glutinous rice (sticky rice), sugar, red beans and vegetable oil.

The rice balls are supplied frozen with instructions for defrosting and cooking. 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)). Glutinous rice balls satisfy the definition of food contained in paragraph 38-4(1)(a) as they are 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 of the GST Act (Schedule 1). Glutinous rice balls are not specified in Schedule 1 nor are they food of a kind specified in Schedule 1.

In addition, the supply of glutinous rice balls 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 glutinous rice balls with sweet filling.