Original publication date: 2 October 2023 | Updated: 23 September 2026
GST on food in Australia can be surprisingly complex. Some everyday foods are GST-free, while other products that look very similar are taxable.
For businesses that manufacture, wholesale, retail or serve food, getting the classification right affects pricing, GST reporting and Business Activity Statements. The answer can depend on what the product is, how it is prepared, how it is marketed, whether it is served hot, and where it is consumed.
Basic foods such as fresh fruit, vegetables, plain bread, unflavoured milk and many cooking ingredients are generally GST-free. However, confectionery, many snack foods, prepared meals, restaurant meals and most beverages are taxable.
This guide explains the main GST food rules for Australian businesses and highlights the areas where classification often becomes less straightforward.
Quick Summary
- Many basic foods are GST-free, but not all food is GST-free.
- Food for consumption on the premises where it is sold is generally taxable.
- Hot takeaway food is generally taxable.
- Many confectionery products, savoury snacks, bakery products and prepared meals are taxable under the GST food rules.
- Beverages are generally taxable unless they fall within a specific GST-free category.
- Unflavoured milk and natural non-carbonated water without additives are examples of GST-free beverages.
- Non-alcoholic, non-carbonated fruit or vegetable juice generally needs to contain at least 90% juice by volume to qualify as GST-free under the relevant rule.
- A combination food containing a separately identifiable taxable food can make the whole combination taxable, depending on how the components are joined and supplied.
- A hamper containing distinct packaged taxable and GST-free items is generally treated differently from a combination food. Its components may need to be taxed separately.
- Product name alone does not determine GST treatment. Ingredients, presentation, marketing, storage requirements and the way the product is supplied can all matter.
Is Food GST-Free in Australia?
Many foods for human consumption are GST-free under Australian GST law, but there are important exclusions.
The GST Act broadly treats food for human consumption, ingredients for food, certain beverages and beverage ingredients, condiments, spices, seasonings and culinary fats and oils as food. Section 38-2 then makes supplies of food GST-free unless an exclusion applies.
The exclusions are what create much of the complexity. Food can become taxable because of its type, how it is supplied, where it is consumed or whether it falls within a listed category.
What Foods Are Generally GST-Free?
Common examples of foods that can be GST-free include:
- fresh, frozen or raw meat for human consumption, other than taxable prepared meals
- fresh fruit and vegetables
- plain bread and bread rolls without a sweet filling or sweet coating
- flour, sugar and many basic cooking ingredients
- unflavoured milk, cream, cheese and eggs
- spices, seasonings and condiments
- culinary fats and oils
- natural non-carbonated water without additives
- some fruit and vegetable juices that satisfy the specific beverage rules.
A product appearing similar to one of these examples is not enough on its own. Businesses should still check whether one of the taxable-food exclusions applies.
What Food Is Taxable?
Food can be taxable where it falls within one of the exclusions in the GST law. Major categories include:
- food supplied for consumption on the premises where it is sold
- hot food supplied for consumption away from the premises
- certain prepared meals
- confectionery
- many savoury snacks
- ice cream and similar frozen products
- many bakery products such as cakes, pastries and biscuits
- certain processed nuts and seeds
- combination foods containing taxable food components
- beverages that do not fall within the specific GST-free beverage categories.
Because these categories contain detailed rules and exceptions, classification should be based on the actual product rather than a general assumption about whether it seems like a basic food.
Is Dine-In Food Subject to GST?
Generally, yes.
Food supplied for consumption on the premises from which it is supplied is excluded from the GST-free food rules. This means food eaten at a restaurant, café or similar premises is generally taxable even where the same underlying food might be GST-free when sold in another context.
For example, a plain bread roll may ordinarily be GST-free when sold as a grocery item. If it is supplied for consumption at a restaurant, the dine-in exclusion can make the supply taxable.
Businesses that sell the same products for both dine-in and takeaway need systems that apply the correct GST treatment at the point of sale.
Is Takeaway Food Subject to GST?
It depends on the food and how it is supplied.
Hot food supplied for consumption away from the premises is taxable. A hot cooked chicken sold for takeaway, for example, is taxable. A cold cooked chicken supplied for consumption away from the premises can be GST-free where no other taxable-food rule applies.
Cold takeaway food is not automatically GST-free. A cold product may still be taxable because it is confectionery, a bakery product, a prepared meal, a savoury snack or another food listed in the taxable categories.
How Does GST Apply to Prepared Meals?
Prepared meals are an important area for food businesses because the classification is based on more than whether a product is already hot.
Under current ATO guidance, food can be of a kind marketed as a prepared meal whether it is supplied hot or cold, or whether it requires cooking, heating, thawing or chilling before consumption.
For the prepared-meal category in Schedule 1, the product must also require refrigeration or freezing for storage. Shelf-stable products are not taxable under that particular prepared-meal item, although another GST rule may still make them taxable.
The ATO’s current approach considers the product as a whole. Quantity, composition, presentation and how foods of that kind are marketed can all be relevant.
This means businesses should not rely on one feature, such as the label, the serving temperature or the fact that some preparation is still required.
Are Salads GST-Free?
Some salads are GST-free and others can be taxable prepared meals.
The ATO recognises that salads cover a broad range of products. A simple side salad or coleslaw may be treated differently from a product that has the characteristics of a complete prepared meal.
Factors can include the quantity, mix of ingredients, presence of meat or seafood, presentation, serving size, heating instructions and whether the product is sold in a dine-in or takeaway environment.
Businesses selling packaged salads should check the ATO’s Detailed Food List and current prepared-meal guidance rather than assuming every cold salad has the same GST treatment.
Are Bread, Cakes and Bakery Products GST-Free?
Plain bread and bread rolls without a sweet filling or sweet coating are generally GST-free.
Many other bakery products are taxable. Cakes, slices, pastries, doughnuts and many biscuit goods fall within taxable categories.
The distinction can become detailed. For example, the ATO lists fruit buns and hot cross buns without icing or filling as GST-free, while a fruit bun with a sweet filling or coating is taxable.
For bakeries and food retailers, product setup in the point-of-sale and accounting systems should reflect the classification of each product rather than applying one GST code to the entire bakery category.
Are Nuts, Seeds and Breakfast Products Subject to GST?
This is the issue covered by Cotchy’s original 2023 article, and it remains relevant.
Breakfast foods consisting principally of compressed, rolled or flattened cereal can be GST-free. However, products consisting principally of seeds or nuts that have been processed or treated by salting, spicing, smoking, roasting or similar processes can be taxable.
The ATO’s current Detailed Food List also reflects the combination-food rules. A breakfast product that combines foods and includes a taxable food component can be taxable depending on the nature of the combination.
This is why calling a product ‘breakfast cereal’, ‘granola’ or ‘muesli’ does not by itself determine its GST status.
Are Drinks and Beverages GST-Free?
Beverages work differently from many other foods.
A beverage is generally taxable unless it falls within a category specifically listed as GST-free in Schedule 2 of the GST Act.
Examples of GST-free beverages can include unflavoured milk and natural non-carbonated water without additives. Certain fruit and vegetable juices also qualify where they meet the statutory requirements.
Flavoured water, many soft drinks, flavoured milk beverages and many other ready-to-drink products are taxable.
What Is the 90% Juice Rule?
For non-alcoholic, non-carbonated fruit or vegetable juice, the beverage generally needs to consist of at least 90% fruit or vegetable juice by volume to fall within the relevant GST-free category.
The ATO’s Detailed Food List identifies ready-to-drink non-carbonated juices containing at least 90% fruit or vegetable juice as GST-free. Juice drinks below 90% are generally taxable under this rule.
Carbonated fruit or vegetable beverages have a different test. To qualify under the relevant GST-free category, they must consist wholly of fruit or vegetable juice.
Businesses producing or selling juice products should therefore check both composition and carbonation rather than applying one rule to all juice beverages.
What Is a Combination Food?
A combination food is not simply two foods purchased in the same transaction.
Under the ATO’s current guidance, a combination food involves components that are sufficiently joined together so they are supplied as a single item for consumption. Physical appearance, packaging, labelling, marketing, product design, manner of sale and the consumer experience can all be relevant.
If a product is a combination of foods and at least one separately identifiable component is a taxable food of the relevant kind, the combination can be taxable.
For example, a product designed and sold as one snack can be treated differently from separate grocery items that happen to be bought together.
Combination Food vs Hamper: Why the Difference Matters
A hamper containing separate, individually packaged products is generally not treated as one combination food merely because the items are placed in the same hamper.
Instead, a hamper can be a mixed supply. Taxable and GST-free components are identified and the consideration may need to be apportioned.
By contrast, a snack pack or other product whose components are sufficiently joined and marketed as a single food item can be a taxable combination food.
The distinction matters for gift-box businesses, food retailers, e-commerce stores and manufacturers selling multi-component products.
For online sellers, Cotchy’s E-Commerce Tax and Compliance Checklist covers broader GST, record-keeping and reporting obligations.
Does Packaging Affect the GST Treatment of Food?
Normal and necessary packaging generally follows the GST treatment of the food it contains.
The ATO considers packaging such as ordinary tins, bottles, jars and boxes used to contain, protect and promote food to be normal and necessary in many cases.
Special promotional packaging or separate promotional items can create a different outcome. Where taxable packaging or another taxable component is significant, the supply may need to be treated as a mixed supply and apportioned.
For most ordinary food products, the key issue remains the GST classification of the food itself. Businesses using premium gift packaging or bundled non-food items should check the additional rules.
What If a Business Sells Both GST-Free and Taxable Food?
Many food businesses sell a mixture of GST-free and taxable products.
A supermarket may sell GST-free fresh produce alongside taxable confectionery and soft drinks. A bakery may sell GST-free plain bread alongside taxable cakes and pastries. A café can have additional rules because food consumed on the premises is taxable.
The accounting and point-of-sale systems need to distinguish these categories accurately. Applying GST to every food item can overcharge customers and distort BAS reporting. Failing to apply GST to taxable products can leave the business with an underreported GST liability.
GST collected and GST credits are reported through the Business Activity Statement (BAS), so product classification should flow correctly into the bookkeeping and BAS process.
What Happens If You Have Been Charging the Wrong GST?
If a business discovers that food products have been classified incorrectly, the next step depends on what went wrong, the amounts involved and the reporting periods affected.
The business may need to correct GST errors in a later BAS or revise an earlier activity statement, subject to the ATO’s correction rules. In some situations, a voluntary disclosure may also be relevant.
Do not simply change the product code going forward without checking whether past BAS reporting also needs attention.
Where the issue affects a large product range or several reporting periods, quantify the error before deciding how it should be corrected.
If historical coding is incomplete or unreliable, Cotchy’s catch-up bookkeeping service can help bring business records up to date before the GST position is reviewed.
What Records Should Food Businesses Keep?
Food businesses should keep records that support both their sales and the GST treatment applied to products. Depending on the business, useful records can include:
- product descriptions and ingredient lists
- supplier invoices and tax invoices
- product specifications
- packaging and labelling information
- marketing material where classification depends on how the product is marketed
- point-of-sale GST settings
- sales reports
- BAS working papers
- records of GST classification reviews and changes
- relevant ATO guidance or product rulings relied on for difficult classifications.
Cotchy’s guide to business record keeping requirements explains the broader record-keeping obligations for Australian businesses.
How Can Businesses Check the GST Status of a Food Product?
Start with the ATO’s GST food guidance and Detailed Food List.
The Detailed Food List provides the ATO’s GST treatment for a large range of food and beverage product lines. It is particularly useful where similar products can have different outcomes.
For products that are not clearly covered, consider the relevant legislation and current ATO determinations, including the guidance on combination foods and prepared meals.
Businesses with a new or unusual product should avoid guessing from the GST treatment of a competitor’s product. Small differences in ingredients, storage, presentation or marketing can change the result.
Common GST-on-Food Mistakes
- Assuming all food is GST-free.
- Assuming all takeaway food is taxable.
- Treating a cold prepared meal as GST-free simply because it is not heated.
- Using one GST code for every bakery product.
- Assuming a product name such as cereal, salad or meal kit determines its GST treatment.
- Applying the 90% juice rule to every type of juice beverage without checking whether the product is carbonated.
- Treating a hamper and a combination food as the same thing.
- Failing to update product GST codes when a recipe, packaging or marketing approach changes.
- Relying on an old classification without checking current ATO guidance.
- Correcting the point-of-sale system but failing to review whether previous BAS lodgements were affected.
GST on Food: Examples at a Glance
| Product or supply | Typical GST treatment | Important qualification |
| Fresh fruit and vegetables | GST-free | Assuming supplied as ordinary food and no taxable rule applies |
| Plain bread or bread roll | GST-free | No sweet filling or sweet coating; dine-in rules can change treatment |
| Cake or doughnut | Taxable | Falls within taxable bakery categories |
| Unflavoured milk | GST-free | Flavoured milk beverages can be taxable |
| Natural non-carbonated water without additives | GST-free | Flavoured water is generally taxable |
| Non-carbonated fruit/vegetable juice with at least 90% juice | GST-free | Subject to the specific beverage rules |
| Juice drink below 90% juice | Taxable | Does not satisfy the relevant 90% juice category |
| Hot takeaway food | Taxable | Hot food supplied for consumption away from premises |
| Food consumed on seller’s premises | Taxable | Dine-in exclusion applies |
| Cold cooked chicken sold takeaway | GST-free | Where no other taxable-food rule applies |
| Roasted/processed nuts or seeds of the relevant kind | Taxable | Schedule 1 rules can apply |
| Hamper with separate taxable and GST-free items | Mixed supply | Components are generally treated separately |
| Combination food containing a taxable component | Taxable | Where the statutory combination-food rule applies |
Frequently Asked Questions
Is GST charged on food in Australia?
Some food is subject to GST and some is GST-free. Basic foods are often GST-free, while dine-in food, hot takeaway food and many prepared meals, confectionery, snacks, bakery products and beverages are taxable.
Is fresh food GST-free?
Many fresh foods such as fruit, vegetables and raw meat for human consumption are GST-free, provided no taxable-food exclusion applies.
Is takeaway food GST-free?
Not always. Hot takeaway food is taxable. Cold takeaway food may be GST-free or taxable depending on the product and the other GST food rules.
Is restaurant food subject to GST?
Food supplied for consumption on the premises is generally taxable.
Is bread GST-free?
Plain bread and bread rolls without a sweet filling or sweet coating are generally GST-free. Many cakes, pastries, doughnuts and biscuit goods are taxable.
Is bottled water GST-free?
Natural non-carbonated water without additives can be GST-free. Flavoured water and many other beverages are taxable.
Is fruit juice GST-free?
Non-alcoholic, non-carbonated fruit or vegetable juice generally needs to contain at least 90% juice by volume to qualify under the relevant GST-free category. Carbonated juice has a different test.
Are prepared meals subject to GST?
Many refrigerated or frozen products that are food of a kind marketed as prepared meals are taxable. The classification depends on the product as a whole and the statutory rules.
Are food hampers subject to GST?
A hamper containing separate packaged taxable and GST-free items can be a mixed supply, with the components treated separately. This differs from a taxable combination food.
What should I do if I have charged the wrong GST on food?
Review the affected products and reporting periods, quantify the error and check the ATO’s rules for correcting GST mistakes or revising activity statements. Professional assistance may be appropriate where the issue is material or affects multiple periods.
Make Food GST Classification Part of Your Systems
GST classification should not be an afterthought when a food product reaches the checkout.
For manufacturers, wholesalers, retailers, cafés and e-commerce businesses, the correct GST treatment should be built into product setup, pricing, bookkeeping and BAS reporting.
Review classifications when products change. A different recipe, serving method, storage requirement, package format or marketing approach can affect the GST analysis.
Where the classification is uncertain, check current ATO guidance before relying on an assumption.
Cotchy provides bookkeeping services that help businesses keep GST coding, reconciliations and BAS information accurate.
For assistance with GST and other business tax obligations, see Cotchy’s taxation services.
