• GST on livestock and game sales

    Sales of animals are subject to goods and services tax (GST) while sales of meat for human consumption are GST-free.

    On this page, when we say:

    • purchases – we are referring to the GST term acquisitions 
    • sales – we are referring to the GST term supplies 
    • you – we mean you as a producer of livestock and game.

    Find out about:

    When is meat GST-free?

    Meat, excluding crustaceans and molluscs, is GST-free when it becomes food fit 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).

    This means if a carcass is sold before it has been passed as food for human consumption, the sale will be subject to GST.

    Are livestock and game sales to processors subject to GST?

    Yes. 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:

    Sales under direct consignment 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.

    Contract or service kills

    There are two types of arrangements for contract or service kills, where either the end-buyer or you as the producer enter into a contract with the processor.

    The end-buyer and processor

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

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

    Flowchart showing the transactions subject to GST

    The producer and 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  
    • you sell the meat and by-products.

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

    Flowchart showing the transactions on which GST is payable.

    Generally the producer will be selling GST-free meat.

    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 needs 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 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.

    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 you can:

    • view the information on Primary producers
    • phone us on 13 28 66
    • 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.

      Last modified: 24 Aug 2016QC 16281