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  • Issue 30 – Food given to staff

    Food outlets that sell prepared food may sell food that is left unsold at the end of the day to staff for a nominal amount.

    Issue

    What is the GST treatment of supplying unsold food to staff?

    Does this affect the input tax credits entitlement?

    For source of ATO view, refer to the general application of the principles in GSTR 2001/3 - Goods and services tax: GST and how it applies to supplies of fringe benefits.

    Decision

    Food that is sold to staff, even for a nominal amount will be a taxable supply where the food is not a GST-free supply. If food is given to staff free of charge, there is no taxable supply as there is no consideration.

    Entitlement to input tax credits is not affected when food that was intended for sale remaining unsold at the end of the day's trading is supplied to staff for a lower amount. The requirements for a creditable acquisition are provided in section 11-5 of the GST Act.

    Conversely, food that is taken by the proprietor for private use will constitute an adjustment event - there is no longer an entitlement to the input tax credits.

    References

    See GST Ruling, GSTR 2001/3 - Goods and Services Tax: GST and how it applies to supplies of fringe benefits.

      Last modified: 28 Jun 2010QC 17694