Emerging issues
We publish the emerging GST issues we're seeing to give you early information when we are:
- considering whether new or updated public guidance is needed for new products or products that have changed over time.
- identifying common misunderstandings or issues on specific product types to help you correct any misclassification.
We'll update these emerging issues on a regular basis. You can also find more information about the GST food classification guidance and resources we have available.
Rice cakes
Our current view on rice cakes is explained in Issue 26 – Are crispbreads and rice cakes subject to GST?. It outlines that only rice cakes made principally from compressed cereal are GST-free.
However, the detailed food list (DFL) entry 656 currently lists that all rice cakes as GST-free, despite including a note implying it only covers rice cakes made principally from compressed cereal.
We're reviewing DFL entry 656 to make it clearer and easier to understand that not all rice cakes are GST-free.
While this entry is being reviewed, you can choose to rely on either DFL entry 656 or Issue 26 as they both are public rulings.
Toddler formula
Item 13 of Schedule 2 provides that 'beverages, or ingredients for beverages, of a kind marketed principally as food for infants or invalids' are GST-free. Issue 14 – Beverages for infants outlines our current view that an infant is defined as a person up to the age of 12 months. Based on our current view, formula which is marketed principally for children above the age of 12 months is not GST-free.
Since Issue 14 was published, there has been significant developments in the industry and we've received feedback asking us to review if an infant can be a person beyond the age of 12 months.
We're reviewing our view on how GST applies to toddler formula marketed principally for children above the age of 12 months. We won't devote compliance resources to these products until this review is completed.
You can be updated about this review by checking our public advice and guidance under development page.
Dried or dehydrated fruit for adding to beverages
Through our compliance and advising work we have identified that dried or dehydrated fruits that are designed for flavouring, or decorating alcoholic beverages are commonly misclassified.
Our view is that these products are taxable because they are ingredients for beverages and are not GST-free under Schedule 2.
We acknowledge that the DFL entry 356 lists 'fruit (fresh, dried, canned, packaged)' as GST-free. We're reviewing this entry to make it clear that it is only GST-free when the use of the product is not for the purpose of adding to beverages (based on the design and marketing of the product). A dried or dehydrated fruit product is taxable when it is designed and marketed as an ingredient for a beverage.
You can rely on DFL entry 356 that lists 'fruit (fresh, dried, canned, packaged)' as GST-free while it's being reviewed.
Fruit bars and strips
Fruit bars and strips that are confectionery or marketed as confectionery are taxable. Item 8 of Schedule 1 provides that confectionery, food marketed as confectionery, food marketed as ingredients for confectionery or food consisting principally of confectionery are not GST-free. Issue 12 - Food marketed as confectionery or ingredients for confectionery provides guidance on the application of Item 8 of Schedule 1.
DFL entry 361 states fruit bars and strips are only GST-free when they're made from 100% of fruit ingredients.
A previous DFL entry that was removed in 2011, listed fruit snacks (including processed fruit bars and strips) with a sugar content less than 40% as GST-free.
We are considering if further public guidance should be developed to determine whether fruit bars and strips that are not made from 100% of fruit ingredients will be taxable. Until the review is completed, DFL entry 361 and Issue 12 should be followed when classifying fruit bars and strips.
Food versus supplements
Our current view on supplements is set out in Issue 21 - Vitamins and minerals. The supply of nutritional supplements, including vitamins and minerals, supplied in a capsule, caplet or tablet form, are taxable supplies. This is because the essential character of a supplement is not considered to be food for human consumption under paragraph 38-4(1)(a) of the GST Act.
We're reviewing this guidance to determine if further guidance should be developed to explain the principles to distinguish food and supplements. Any such guidance would need to cover principles that help determine which of the following 3 possible classification outcomes apply to a product:
- not food - taxable
- food that is not an ingredient for a beverage - GST-free, if the product is not of a kind of food listed in Schedule 1.
- food that is an ingredient for a beverage - taxable, unless the food is of a kind listed on Schedule 2.
Dried or crispbread products
Item 32 of Schedule 1 provides that food that is, or consists principally of, biscuits, cookies, crackers, pretzels, cones or wafers are not GST-free. Issue 26 – Are crispbreads and rice cakes subject to GST? explains that crispbreads fit within the definition of a biscuit and are subject to GST. It also states that dried bread products, such as oven baked toasts, mini toasts and rusks, are not considered to be crispbreads.
DFL entry 1296 currently lists all grissini (bread sticks) as GST-free. This entry is too broad as some bread sticks could be crispbreads and therefore subject to GST.
We're reviewing the principles from the Lansell House court decision to determine if our guidance about dried or crispbread products, including DFL entries, needs to be updated.