GST issues registers

Food industry partnership

Issue 30 – Pastry products

What are considered 'pastries' for the purpose of Schedule 1?

For source of ATO view, refer to the Detailed food list.

A supply of food is GST-free in accordance with section 38-2 of the GST Act. 'Food' is defined in subsection 38-4(1) to include:

'(a)

food for human consumption (whether or not requiring further processing or treatment);…'

However, a supply of food will be subject to GST in accordance with subsection 38-3(1) if it is:

'(a)

food for consumption on the premises from which it is supplied; or

(b)

hot food for consumption away from those premises; or

(c)

food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind;…' (emphasis added)

Clause 1 of Schedule 1 of the GST Act specifies a range of foods that are not GST-free. In relation to pastry foods, the following items are included in Schedule 1:

Item 22 'pies (meat, vegetable or fruit), pasties and sausage rolls

Item 23 tarts and pastries

Item 24 doughnuts and croissants

Item 25 pastizzi, calzoni and brioche'

Clause 2 of Schedule 1 operates to ensure that these items are subject to GST regardless of whether they are supplied hot or cold, or require cooking, heating, thawing or chilling prior to consumption.

The Macquarie Concise Dictionary 3rd Edition ('the dictionary') defines 'pastry' to be:

'1. food made of paste or dough, as the crust of pies, etc. 2. articles of food of which such paste forms an essential part, as pies, tarts, etc.'

Pastry products that are specifically included in Schedule 1, such as pies, pasties, sausage rolls, pastries and pastizzi, are without any doubt subject to GST. However, there are a number of other products that need to be considered. These include, but are not limited to:

•

dim sims

•

spring rolls

•

samosas

•

curry puffs

•

chicken filo parcels

•

beef wellingtons

•

vegetable (and other fillings) triangles/parcels

All of these products incorporate pastry as their outer layer. However, the issue is whether these products are captured by items 22 - 25 of Schedule 1 of the GST Act.

It is possible that these products, although not specifically included in Schedule 1 of the Act, may be subject to GST by virtue of paragraph 38-3(1)(c). Paragraph 38-3(1)(c) of the Act refers to 'food of a kind specified in the third column of the table in clause 1 of Schedule 1…' (emphasis added). The inclusion of the words of a kind indicates that foods are taxable if they are of the class or genus referred to in Schedule 1.

The words 'of a kind' and their meaning have been considered in a number of court cases including Hygienic Lily Ltd v Deputy Commissioner of Taxation (NSW) (1987) 13 FCR 399, Sherwood Overseas Pty Ltd v FC of T 1985 and Diethelm Manufacturing Pty Ltd v FC of T 1992.

Gummow J in Hygienic Lily Ltd states:

'…the setting in which the phrase 'goods of a kind' appears suggests it is directed not to the use for which the particular goods in question were designed or manufactured, nor to the purpose to which it is intended those particular goods shall be put, but rather to their nature, quality and adaptation of the goods in the class or genus in question. Thus, goods are 'of a kind ordinarily used for household purposes' if they are to be recognised as members of a class or genus which commonly or regularly (albeit not necessarily exclusively or principally) is used for household purposes: cf Customs and Excise Commrs v Mechanical Services (Trailer Engineers) Ltd [1979] 1 WLR 305 at 312-13, 315, 316-17.'

Can it be determined that any of the foods in question are of a kind listed in Schedule 1? In considering this, it is relevant to look at the products in question.

The dictionary defines the foods listed in Schedule 1 of the Act as:

Pie 'a baked dish consisting of a sweet (fruit, etc.) or savoury (meat, fish, etc.) filling, enclosed in or covered by pastry, or sometimes other topping as mashed potatoes.'

Pastie 'a type of pie in which a circular piece of pastry is folded around a filling of vegetables, meat, etc., and baked.'

Sausage roll 'a roll of baked pastry filled with sausage meat.'

Pastizzi not defined in the dictionary.

The following dictionary definitions are given to those products that are not listed in Schedule 1. These definitions are beneficial in determining whether particular products are of a kind referred to in Schedule 1.

Dim Sim 'a dish of Chinese origin, made of seasoned meat wrapped in thin dough and steamed or fried.'

Dim Sum '(in Chinese cookery) small dumplings with savoury or sweet fillings, either steamed or fried.'

Spring roll 'a Chinese delicacy consisting of a savoury filling wrapped in a thin dough and deep fried.'

Samosa 'a savoury pastry with curried meat or vegetable filling, usually triangular in shape.' Recipe books indicate that samosas are fried.

Curry puffs 'a small puff pastry pasty filled with spiced meat or vegetables, typical of Malay cookery.' Recipe books indicate that curry puffs are generally fried.

The following four products are not defined in the dictionary, however recipe books indicate the following

In order for products to be of a kind known as 'pastizzi', they will need to be baked. Those products that are fried cannot be considered to be of the same kind. Similarly, foods such as beef wellington and chicken filo parcels, although baked, contain raw meat and are not of a kind known as 'pies', 'pasties' and 'sausage rolls' referred to in item 22 of Schedule 1, or 'pastries' referred to in item 23 of Schedule 1 of the Act.

Therefore, only vegetable (and other fillings) triangles/parcels are considered to be food of a kind known as 'pastizzi' in item 25 of Schedule 1 of the Act.

Finally, can the remainder of the products be classified as 'pastries' under item 23 of Schedule 1 of the GST Act? The answer to this is no. The reference to pastries is to those products that are sweet and might be considered similar to a tart, and are generally sold by a bakery (although they may be supplied in other stores for example, supermarkets). For example, Danish pastries, or profiteroles that are made from choux pastry and contain a custard or cream filling. Item 23 of Schedule 1 is not intended to be a catch all provision for all products that are made from pastry.

Therefore, by applying the words 'food of a kind' in paragraph 38-3(1)(c) it can be concluded that the following foods

•

dim sims

•

spring rolls

•

samosas

•

chicken filo parcels

•

vegetable (and other fillings) triangles/parcels

•

curry puffs

•

beef wellingtons

are not food of a kind known as 'pies', 'pasties' and 'sausage rolls' referred to in item 22 of Schedule 1, or 'pastries' referred to in item 23 of Schedule 1 of the Act.

Conclusion

The following products are subject to GST:

•

pies

•

pasties

•

sausage rolls

•

pastizzi

•

vegetable (and other fillings) triangles/parcels

The following products are GST-free:

•

dim sims

•

spring rolls

•

samosas

•

curry puffs

•

chicken filo parcels

•

beef wellingtons

Queries concerning products that do not fall into these categories should be forwarded to the ATO for advice: gstmail@ato.gov.au.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).