TAXATION RULING NO. ST 2157

ST 2157

SALES TAX : HERBAL TEA AND TEA ALTERNATIVES - ROOIBOS TEA AND ROOITEA.

• Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.
  This document has been Withdrawn.
  View the Withdrawal notice for this document.

FOI status:

PREAMBLE

Sub-item 35A(1) in the First Schedule to the Sales Tax (Exemptions and Classifications) Act exempts -

"Tea and preparations that are marketed exclusively, or primarily and principally, as tea preparations, being preparations for potable use the ingredients of which consist principally of tea or principally of -

(a)

tea; and

(b)

milk, milk powder ...".

FACTS

2. Among the various kinds of herbal teas or tea alternatives on the market is a product known commercially as rooibos tea, redbush tea, rooitea or red tea, which is made from the rooibos tea plant (Aspalathus Linearis), also known as bush tea. It is available in both tea bags and loose leaf form. Like herbal teas it is marketed as an alternative tea beverage to "Black Tea" (Camellia sinensis or Thea sinensis). Emphasis is placed on the fact that it is more beneficial than black tea because it contains no caffeine and has a low tannin content.

RULING

3. Because the term "tea" is not defined in the sales tax legislation, the word in its context in sub-item 35A(1) is given the meaning that is ordinarily applied to it when used on its own without any qualifications, i.e. the leaf of, and potable infusions made from the leaves of, the plant Camellia sinensis (or Thea sinensis).

4. Herbal teas or tea alternatives such as rooibos tea and rooitea are not accepted as tea or preparations consisting principally of tea for the purposes of sub-item 35A(1). They are taxable at the general rate of 20%.

COMMISSIONER OF TAXATION
7 August 1985

References

ATO references:
NO 84/1583-8

Related Rulings/Determinations:

ST 2200

Subject References:
HERBAL TEA AND
TEA ALTERNATIVES -
ROOIBOS TEA AND
ROOITEA.

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT, ITEM 35A, FIRST SCHEDULE.