Guide
What is GST-free in Australia?
Not everything carries 10%. Some things are GST-free, some are input taxed, and the difference changes what a business can claim.
The categories
Three different things
| Category | GST charged? | Can the seller claim GST credits? |
|---|---|---|
| Taxable | Yes, 10% | Yes |
| GST-free | No | Yes |
| Input taxed | No | No |
That middle row is the one worth understanding. GST-free is not the same as exempt: no GST is charged to the customer, but the business can still claim back the GST on what it bought to make the sale.
Commonly GST-free
- Most basic food — bread, plain milk, fruit, vegetables, meat
- Most medical and health services
- Most educational courses
- Childcare that meets the relevant conditions
- Exports, when the conditions are met
- Some medical aids and appliances
Food is where it gets fiddly
Basic food is generally GST-free. Food that has been prepared, or is sold to eat on the spot, generally is not.
| GST-free | Taxable |
|---|---|
| A loaf of bread | A sandwich |
| Plain milk | A flavoured milkshake |
| Tea and coffee, unprepared | A takeaway coffee |
| Fruit | A fruit juice drink under 90% juice |
| Plain biscuits? No — biscuits are taxable | Biscuits, cakes, confectionery |
The boundaries are genuinely detailed, and the ATO publishes a food list for exactly this reason. If a line of your menu sits near the edge, check it rather than guess.
Commonly input taxed
- Residential rent
- Most financial supplies, such as lending and bank fees
No GST is charged, and the supplier generally cannot claim GST credits on related purchases either.
Getting it wrong costs real money
Charging GST on a GST-free sale means collecting tax you should not have. Missing GST on a taxable sale means paying it out of your own margin. If a product sits close to a boundary, the ATO's own guidance is the reference — this page is a starting point, not advice.
GST-free questions
What items are GST-free in Australia?
Most basic food, most medical and health services, most education, childcare that meets the conditions, and exports that meet the conditions.
Is there GST on food in Australia?
Basic food is generally GST-free. Prepared food, takeaway, restaurant meals, confectionery, biscuits and soft drinks are generally taxable.
What is the difference between GST-free and input taxed?
Neither charges GST to the customer. With GST-free sales the business can still claim GST credits on its purchases; with input taxed sales it generally cannot.
Is rent subject to GST?
Residential rent is generally input taxed, so no GST is charged. Commercial rent is generally taxable. The distinction matters, so check your situation.
Is coffee GST-free?
Unprepared coffee bought at a supermarket is generally GST-free. A takeaway coffee made for you is generally taxable.