Resources to help small business classify food and health products for GST purposes
Alongside the ATO’s GST public advice and guidance (e.g. ATO Interpretive Decisions, GST Issues Register Health Industry Partnership), the new GST food, beverage and health classification resources can help you work out if your products are taxable or GST-free.
Ensuring that the food and health products you sell are correctly classified for GST purposes is critical to ensuring you correctly report your GST.
You should review the GST classification of the products you sell whenever you make product changes, change your marketing, or even when consumers start using your products differently.
The following tools can help you.
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Detailed food list
The detailed food list (DFL) sets out food and non-alcoholic beverage products that have been classified by the ATO as either GST-free or taxable.
Covering major product lines listed from A to Z, the DFL can be manually searched to locate an item.
The DFL also contains a table outlining changes that have been made over time.
GST food and beverage search tool
The GST food and beverage search tool is designed to allow you to quickly search for food and non-alcoholic beverage products to determine if they’re taxable or GST-free. For example, say your business sells coffee beans: chocolate-coated beans as a snack product and ground coffee beans.
Entering “coffee beans” into the search tool brings up a list of related items for you to choose from.
Selecting “chocolate coated coffee beans” returns the result of “taxable”, while selecting “coffee beans (green, roasted, ground)” returns the result of “GST-free”, allowing you to classify both products correctly.
The tool should not be used if your food or non-alcoholic beverage item is supplied as a hot takeaway or a dine-in item (including food or beverages for on-premises consumption) as these items are taxable.
National Product Catalogue
The National Product Catalogue (NPC), from barcode provider GS1 Australia, can help you determine the GST classification of certain food and beverage products.
The ATO has an arrangement with GS1 Australia to ensure that products on the NPC are correctly classified for GST purposes.
When publishing their product information, manufacturers and suppliers can ask the ATO to confirm the GST status of their products through the NPC.
However, it’s important to remember that items listed on the NPC are product-specific and the GST classifications apply to a particular item.
Emerging GST issues
The ATO publishes emerging GST issues on food and health products to give you early information when the ATO is considering new or updated public guidance for products or to identify common misunderstandings and help correct misclassifications of products.
Examples of recent emerging issues include a draft GST determination on when a sunscreen preparation is GST-free, and a review of the DFL entry for rice cakes.
If you’re still uncertain of the GST classification of your item after reviewing these resources, you can seek additional support or guidance using the ATO’s tailored technical assistance services.
Self-review checklists
The ATO’s GST classification of food and health products self-review checklists for small to medium businesses and medium to large businesses are a guide for self-reviewing the GST classification of your products and your GST processes and controls to ensure that you are making the correct GST classification decisions and identifying if you need to take any corrective action.
While the ATO suggests doing a self-review annually, your review timeframe may need to be more frequent if you have a high product turnover, regular changes to your business or you find you’ve made GST classification errors.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.