GST on livestock and game sales

Terms we use When we say: purchases, we are referring to the GST term acquisitions   sales, we are referring to the GST term supplies, and   you, we mean you as a producer of livestock and game.

When is meat GST-free?

The GST definition of food does not include live animals (other than crustaceans or molluscs). For GST purposes, meat is GST-free when it becomes food for human consumption. This happens when an authorised person inspects it and either stamps or passes it as food for human consumption (in accordance with federal, state or territory law).

As a general rule, the GST status of a transaction is worked out when the transaction takes place. Therefore, if a carcass is sold before it has been passed as food for human consumption, the sale will be subject to GST.

Are the livestock and game sales I make to processors subject to GST?

Sales of livestock or game you make to processors are subject to GST. This is the case even if you make the sale under an arrangement where ownership of the livestock or game passes to the processor only after it becomes food for human consumption.

For GST purposes, sales you make under such arrangements are subject to GST regardless of:

• when the ownership of the livestock or game changes under the contract, or
   
• the method used to work out the price of livestock or game you sell (for example, using a weight based method).

How can livestock and game be bought and sold?

Abattoirs, wholesalers and butchers purchase livestock or game under various arrangements. These include:

1. Sales under direct consignment where you sell livestock or game directly to a processor

Livestock or game you sell directly to a processor is subject to GST, regardless of the method you use to work out the sale price.

Producer - Supply of livestock - GST payable - Processor

2. Contract or service kills

The end buyer enters into a contract with a processor

Under this arrangement, the buyer enters into a contract with the processor to slaughter and process the livestock or game that you supply. Under this arrangement, the following transactions are subject to GST:

• the sale of animals you make to the buyer
   
• the service kill that the processor supplies to the buyer
   
• the sale of the by-products that the buyer makes to the processor.

The producer enters into a contract with a processor

Under this arrangement, you enter into a contract with the processor where:

• the processor slaughters and processes your livestock or game for a fee
   
• you retain ownership of the meat and by-products after processing, and
   
• you sell the meat and by-products.

Sales of meat you make are generally GST-free. However, the service kill the processor supplies to you will be subject to GST.

Generally the producer will be selling GST-free meat.

3. Auction sales

If you sell livestock at auction, the sale will be subject to GST if you are registered or required to be registered for GST. The auctioneer will also need to advise bidders whether you are registered for GST before bidding commences on your lot.

You do not include GST in the price of the livestock or game you sell at auction if you are a hobby farmer. This is because, as a hobby farmer, you are not carrying on an enterprise and cannot register for GST.

If you are registered for GST, the auctioneer will need to announce whether the auction price will include GST before the auction begins. If the auction price does not include GST, 10% GST must be added to the knock down bid to work out the correct price of the livestock or game you sell.

4. Sales from one producer to another

If you are registered or required to be registered for GST, sales of livestock and game you make to other producers are subject to GST.

More information For further information: visit our website at www.ato.gov.au phone 13 28 66, or write to us at Australian Taxation Office PO Box 3524 ALBURY  NSW  2640.

If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.

If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.