Broadly, 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 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 is a business with turnover of less than $2 million. The definition of turnover for these purposes varies slightly according to the method chosen.
See details of the “SAM” (Simplified Accounting Methods) here: Simplified GST accounting methods for food retailers
- ATO – detailed food list and classification tool
- GST Simplified Accounting Method Determination (No.38) 2016 for Restaurants, Cafes and Caterers – purchases snapshot method
- Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods
This page was last modified 2017-11-14