1 Is the supply of the Product GST-free pursuant to section 38-2 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Yes. Under section 38-2 of the GST Act 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. The supply of the Product is GST-free under section 38-2 of the GST Act because: the Product is food for human consumption within the meaning of food under paragraph 38-4(1)(a) of the GST Act and the supply of the Product does not fall within any of the exclusions in section 38-3 of the GST Act. Question 2 Is the importation of the Product a non-taxable importation under paragraph 13-10(b) of the GST Act? Answer Yes. Paragraph 13-10(b) of the GST Act provides that an importation is a non-taxable importation to the extent that, had it been a supply, the supply would have been a GST-free or input taxed supply. The importation of the Product is a non-taxable importation under paragraph 13-10(b) of the GST Act because, as outlined in Question 1, had it been a supply, it would have been GST-free.
You are an importer and are registered for GST. You will soon be importing the Product for sale in Australia. The Product consists in entirety of fruit puree and fruit juice. The Product is available in various flavours and package sizes. The manufacturing process is as follows: 1) Preparation of raw materials 2) Mixing 3) Filtration 4) Pasteurization 5) Form/Hot Fill/Seal 6) Cooling 7) Packaging 8) X Ray 9) Packaging in Carton 10) Storage You provided samples of the Product that will be imported and sold in Australia. The Product is a ready-to-eat fruit puree. The Product is consumed directly from the pouch, either in-home or on-the-go. The Product is shelf-stable, stored in a cool and dry place, with a shelf life of a number of years. The Product will be sold in major retailers. It will be located in the ambient, fruit puree section, in the vicinity of canned fruit.
A New Tax System (Goods and Services Tax) Act 1999 Section 38-2. A New Tax System (Goods and Services Tax) Act 1999 Section 38-3. A New Tax System (Goods and Services Tax) Act 1999 Section 38-4. A New Tax System (Goods and Services Tax) Act 1999 Section 13-5. A New Tax System (Goods and Services Tax) Act 1999 Paragraph 38-10(b).