Food Industry Partnership
If you are involved in the production, preparation or supply of food for human consumption, you will need to understand what is defined as 'food', what food is GST-free and what food is not GST-free.
On this page you will find information about
- The Food Consultative Committee
- Food and the GST
The Food Consultative Committee
The ATO is working in partnership with industry to help create an informed and confident industry that is ready and able to comply as tax reforms are implemented.
The ATO is a participant in the committees established within the business assistance program of the Australian Food and Grocery Council (AFGC).
The key elements and output objectives of the AFGC's program in which the ATO is involved are:
- information on the implementation of the GST through the food production and retail chain, and
- information on determinations on the classification of the GST liable status of food and food-related products.
The key feature of the program is to provide an efficient and effective procedural process for food businesses seeking ATO determinations on the GST status of their products.
The ATO's determinations and rulings will be based on the legislation (including the Schedules) and the Explanatory Memoranda to define the parameters for products.
Food and the GST
You should not assume that your products will be GST-free just because they were previously sales tax exempt. There are important differences between the A New Tax System (Goods and Services Tax) 1999 legislation and the old Sales Tax legislation. If your product is not listed in the GST food guide (NAT 3338) you should contact the ATO to confirm the GST status of your product. You can:
- phone 13 24 78
- write to us at:
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
Once a Private Ruling issues to you, you can rely on it unless you have misstated or suppressed a material fact.
If you find that a competitor is not charging GST on a product that is taxable, you may wish to contact the ATO on 1800 060 062.
For GST purposes 'food' means:
- food for human consumption (whether or not requiring processing or treatment)
- ingredients for food for human consumption
- beverages for human consumption (including water)
- ingredients for beverages for human consumption
- goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings)
- fats and oils marketed for culinary purposes, or
- any combination of any of the above.
What is not defined as 'food'?
There are four exclusions from the meaning of food to make it clear that certain animals and plants are not food for GST purposes until they have been subject to further processing or treatment. The exclusions are:
- live animals - however, live crustaceans and molluscs (for example, lobsters, oysters and crabs) will be GST-free where they are sold for human consumption
- unprocessed cows' milk
- unprocessed grains, cereals or sugar cane - however, if they have been processed or treated, resulting in an alteration of their form, nature or condition, they will be GST-free if sold for human consumption, and
- plants under cultivation - this ensures that plants are not sold GST-free where they are still in a growing medium.
Food marketed for animals is not GST-free as it is not for human consumption.
What food is not GST-free?
Food that falls into any of the following categories is not GST-free:
- restaurant, takeaway and prepared food
- bakery products
- savoury snacks
- biscuit goods, or
- taxable beverages.
Food that is a combination of food that is GST-free and one or more foods from the above categories will not be GST-free. For example, a snack pack containing cheese (which is GST-free) and biscuits will not be GST-free. However, the separate items of food in a hamper are taxed individually.
Restaurant, takeaway and prepared food
Restaurant, takeaway and prepared food will be subject to GST, including:
- all food and drink supplied for consumption on the premises where it is supplied
- all hot food supplied for consumption away from premises, and
- food that is included in the category of prepared food listed in Schedule 1 in GST and food - schedules 1 and 2 (NAT 3393). This includes food similar to food sold by takeaway outlets (such as sandwiches, pizza and pies) that is sold at a supermarket or similar outlet. It also includes frozen meals sold in a form that only requires heating for consumption (such as a TV dinner).
What is meant by 'premises'?
'Premises' is more than just the place where you supply the food. It includes:
- the grounds surrounding a caf , public house or other outlet where food is supplied, and
- the whole of any enclosed space, such as a football ground, garden, showground, amusement park or similar area.
'Premises' does not include any part of a public thoroughfare unless it is designated for use in connection with supplying food from a particular outlet, for example, an annual street food fair.
What is hot food?
Hot food means food for consumption that has been heated above the generally surrounding air temperature.
Food that you sell while it is still warm because it happens to be freshly baked is GST-free (unless it falls under another category of taxable food). For example, freshly baked bread is GST-free.
Hot and cold food supplied as a single item for consumption away from the premises (such as sausage and onion on a slice of bread) will be subject to GST.
What is prepared food?
Prepared food covers a range of food products that directly compete against takeaway shops and restaurants. These products will always be taxable. It does not matter whether they:
- are sold hot, cold or frozen, or
- require any cooking, heating, thawing or chilling before consumption.
Confectionery includes food that is marketed as confectionery, such as chocolate and fruit lollies, muesli bars and glace fruit. However, candied peel is not confectionery.
Products taxed under GST as savoury snacks are based on the wholesale sales tax treatment, with some minor changes. Caviar and other fish roe products are specifically included as savoury snacks. Seeds and nuts which have been processed or treated by salting, spicing, smoking or roasting, or similarly processed or treated, are also included. Unshelled nuts and raw nuts are GST-free.
Ice-cream (including ice-cream cakes and ice-cream substitutes), frozen yoghurt and frozen fruit products are taxable. Frozen whole fruit products are taxable. Frozen whole fruit is GST-free.
Breakfast cereals and rusks for infants or invalids are GST-free. Biscuit goods that are taxable include dry biscuits, savoury biscuits, chocolate biscuits and crispbreads.
All beverages and ingredients for beverages are taxable unless they are in one of the following GST-free categories:
- milk products, lactose, soy milk and rice milk, but not including flavoured milk
- preparations for the making of beverages: tea, coffee, coffee essence, chicory essence, malt, malt extract for drinking purposes, and similar preparations marketed as substitutes for these
- dry preparations marketed for the purposes of flavouring milk
- fruit and vegetable juices if they consist of at least 90% by volume of juices of fruits or vegetables
- non-carbonated natural water without any other additives, and
- beverages and ingredients for beverages marketed as food for infants or invalids.
The schedule of beverages that are GST-free is listed in Schedule 2 in GST and food - schedules 1 and 2 (NAT 3393).
Does the packaging of food attract GST?
Packaging is treated in the same way as the contents. So packaging for GST-free food is also GST-free. However, packaging that is more than usual and necessary for the supply of the food will be taxable. For example, if breakfast cereal is supplied in a plastic container intended for re-use, the container will be taxable. The supply would be partly taxable and partly GST-free.
For more information please refer to the GST food guide (NAT 3338).
End of further information