A Supermarket stacker was planning to take hostages and carry out executions in an attack on ASIO [Australian Security Intelligence Organisation - similar to FBI] or the Department of Foreign Affairs and Trade (DFAT), a court was told today.

Zeky "Zak" Mallah faced a committal hearing at Sydney's Central Local Court today charged with planning a terrorist act and threatening to seriously harm an undercover federal official.

The 21-year-old is the first NSW person charged under federal terrorism laws to face a committal hearing.

He has pleaded not guilty to all charges.

Crown prosecutor Desmond Fagan told the court that Mallah intended to enter the Sydney offices of either ASIO or DFAT, take hostages and "kill at least two" federal agents.

"He intended to make available a final message in doing this," Mr Fagan said.

This message was on a video tape which he sold for $3000, along with a transcript of the tape and photographs of himself, to a federal agent posing as a freelance journalist, the court heard.

Mr Fagan said while the plan was sparked by the Federal Government's refusal to grant Mallah a passport, his motivations were "not purely personal".

"His political motivation broadly speaking was he wished to intimidate the Australian Government."

He said Mallah intended to use the $3000 to clear his debts, which was necessary if he was to become a martyr as he intended.

"He saw it necessary as a matter of religious duty to clear his debts," he said.

The Crown claims he wanted to force the government to soften its security policy and that Mallah believed the government was persecuting Muslims because of their faith.