If you are a business operator involved in producing, preparing or supplying food or beverages for human consumption, from 1 July 2002 you can use a simpler system of accounting for goods and services tax (GST).
GS1 Australia is a non-profit trade organisation that administers the global GS1 system of numbering, bar coding and electronic messaging in Australia. Members include a wide range of industry and administrative sectors, including food and beverage sectors.
Numbers and barcodes can be found on most products sold in retail stores, and each product has a unique number. The barcode represents the GS1 number in a form that can be read by a scanner and entered instantly into a computer. GS1 numbers provide a common language in which manufacturers, wholesalers and retailers can communicate about the goods and services they trade.
GS1net, the product of GS1 Australia, is the new online data synchronisation catalogue for all industry sectors throughout Australasia. GS1net provides a single standardised source of accurate data for trading partners at every step of the supply chain.
We have entered into arrangements with GS1 Australia to ensure food and beverage items shown on GS1net are correctly classified for GST purposes. This will give manufacturers and other suppliers the certainty they need.
Our intention is to reduce the potential loss to manufacturers, other suppliers and revenue in general if products that are subject to GST are misclassified as being GST-free.
We assure manufacturers and other suppliers who rely on GS1net GST classifications for food and grocery products that there will be no risk of penalties or of unfavourable retrospective adjustments to their GST liability.
When new products are recorded on GS1net, GS1 Australia will notify us whether the products are shown as GST-free, or partly taxable and partly GST-free.
If a manufacturer or other supplier does not follow the classification that is recorded on GS1net and confirmed by us, they may have to pay penalties and/or the general interest charge (GIC).
We have specific undertakings with manufacturers where:
- a manufacturer lists a product on GS1net that is GST-free or partly taxable and partly GST-free
- we confirm the classification
- we subsequently determine that the GS1net classification should be changed.
If all of these things occur, we will:
- accept that the manufacturer has acted in good faith and will not apply penalties or GIC
- treat the change in classification as a prospective change to the ATO view and will not require retrospective adjustments to the manufacturer's GST liability.
The above undertakings will only apply where:
- we confirmed GST classifications are published on GS1net at least five business days before the product is made available for sale
- the manufacturer is advised that the GST classification has not been confirmed and revises the GST classification before the product is made available for sale.
The manufacturer may want to request a private ruling from us if they:
- are not sure of a product's GST classification
- disagree with our advice to revise a GST classification.
They must request this ruling before a product is made available for sale and its GST classification is communicated on GS1net.
If the manufacturer is advised that the GST classification has not been confirmed and the manufacturer does not update the GST classification on GS1net, penalties and GIC may apply.
We have specific undertakings with other suppliers where:
- a supplier (other than a manufacturer), at any point in the supply chain, has accurately recorded a GST classification in their own system for supplies they make, based on GST classifications recorded on GS1net for products that are GST-free or partly taxable and partly GST-free
- we subsequently determine that the GS1net classification should be changed.
If both of these things occur, we will:
- accept that the supplier has acted in good faith and will not apply penalties or GIC
- treat the change in classification as a prospective change to the ATO view and will not require retrospective adjustments to the supplier's GST liability.
Where products are sold that are partly taxable and partly GST-free (for example, hampers), we will determine that the supply is correctly classified as a mixed supply and provide certainty that the correct GST rate of 10% has been applied on GS1net to those products that are taxable. For these products, a percentage less than 10% will be shown on GS1net to take into account the GST-free component of the supply. However, in order to provide this certainty, suppliers will need to give us information about the products being supplied.
There are some products that will be either subject to GST or GST-free depending on how they are marketed. For example, food marketed as a prepared meal will be subject to GST and dry preparations marketed principally for flavouring milk will be GST-free. There are other products that are subject to a marketing test and these are specifically listed in schedule 1 and schedule 2 of the GST Act.
Where a marketing test applies, the GST classification can change from one supplier to the next, depending on how the product is marketed. In these cases, suppliers should contact us to find out the correct GST classification.
We have published a range of information products to help businesses involved in producing, preparing and supplying food for human consumption. These include:
For copies of these products and for more information, you can:
- phone 13 28 66
- write to us at
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service on 13 14 50.
If you are deaf, or have a hearing or speech impairment, phone the ATO through the National Relay Service (NRS) on the numbers listed below:
- TTY users, phone 13 36 77 and ask for the ATO number you need
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
- internet relay users, connect to the NRS on www.relayservice.com.au and ask for the ATO number you need.
You can also obtain information from GS1 Australia at www.gs1au.org
Last Modified: Tuesday, 21 August 2012