GST on Food

GST on food

In general, food and beverages for human consumption are GST-free unless it is for consumption at the place of supply, or if it is hot food for consumption elsewhere.

However, the food GST classification rules are quite complex.

Determining whether food is subject to GST variously depends on the ingredients and manner of preparation, the place of preparation and the place, or intended place, of consumption (or intended consumption).

The tax office provides a GST food classification decision tool (linked below), and a detailed food list for major food items to assist the correct classification for vendors of food.

The food list has Ruling status, and as such provides limited protection if relied upon in good faith.

Small business food retailers

Small businesses selling a mixture of gst and non-gst food items may be able to choose one of 5 simplified methods offered by the tax office to estimate the gst content of sales.

A small business retailer for SAM eligibility purposes is a business with turnover of less than $2 million.

The five methods are:

  • Business norms percentages (only certain businesses)
  • Stock purchases
  • Snapshot of trading
  • Sales percentage (only certain businesses)
  • Purchases snapshot

See full details of the “SAM” (Simplified Accounting Methods) here: Simplified GST accounting methods for food retailers

See also:

 

This page was last modified 2017-11-14