New ATO resources for GST food and health product classification
Alongside the ATO's GST public advice and guidance, the new GST food, beverage and health classification resources can help you work out if your products are taxable or GST-free.
Product classification Ensuring your food and health products are correctly classified for GST purposes is critical to ensuring you correctly report your GST. You should review the GST classification of your products w henever you make product changes, change your marketing, or even when consumers start using your products differently. The following tools can help you.
Detailed food list The detailed food list (DFL) sets out food and non-alcoholic beverage products that have been classified by the ATO as GST-free or taxable. Covering major product lines listed from A to Z, the DFL can be manually searched to locate an item. It 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 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. 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 GST classification of certain food and beverage products.
The ATO has an arrangement with GS1 Australia to ensure products on the NPC are correctly GST classified. 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 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, 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 timeframes may need to be more frequent if you have high product turnover, regular changes to your business or find you’ve had GST classification errors.