Are you aware that eating healthy and consuming fresh, nutritious food can actually save you money as no tax is payable when purchasing these food items?
Whilst tax reform is currently in the news, this isn’t a new tax break the government has introduced.
The Goods and Service Tax (GST) has been around for a while now, but what you may not realise is that not all foods are taxed equally.
Some of you may be aware of this, however I am guessing that the majority simply do not.
The Government does not charge GST on fresh produce.
It will however charge you the 10% GST for the majority of your packaged and processed foods.
Food items are classified as either GST-free or taxable food. A food item can also include beverages or ingredients for a beverage.
Sound simple enough thus far?
Of course, but here is where it gets interesting.
A food item may appear on the GST-free list, yet it may still be subject to GST under one of the taxable rules. As an example, bread rolls are GST-free unless they are sold in a restaurant.
Now that is confusing.
In general, if we purchase raw ingredients and prepare our own meals rather than opting for pre-packed or take away food, no tax is usually payable.
Saving money is one thing, but setting aside some time for our food preparation can be one of the real joys of a proactive and healthy life.
So next time you do your grocery shopping, check out how much GST you actually pay.
It maybe a good indication of the choices you’re making for both yourself and your family.
Show us how little GST you pay by posting images of your grocery receipts to the Living Lean Facebook page. Be proud of your dedication to a healthier, happier life.
I am yet to meet a person who doesn’t want to minimise their tax. For those of you who would like a detailed Tax Department description of GST payable and GST exempt foods, we have included this at the end of the blog.
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Australian Tax Office description of GST status of food items.
GST FREE FOOD
The following foods are GST-free:
- bread and bread rolls without a sweet coating (such as icing) or filling – a glaze is not considered a sweet coating
- cooking ingredients, such as flour, sugar, pre-mixes and cake mixes
- fats and oils for cooking
- unflavoured milk, cream, cheese and eggs
- spices, sauces and condiments
- bottled drinking water
- fruit or vegetable juice (of at least 90% by volume of juice of fruit or vegetables)
- tea and coffee (unless ready-to-drink)
- baby food and infant formula
- all meats for human consumption (except prepared meals or savoury snacks)
- fruit, vegetables, fish and soup (fresh, frozen, dried, canned or packaged)
- spreads for bread (such as honey, jam and peanut butter)
- breakfast cereals.
The following foods are taxable:
- bakery products, such as cakes, pastries, pies, sausage rolls (but not including bread and bread rolls)
- biscuits, crispbreads, crackers, cookies, pretzels, cones and wafers
- savoury snacks, confectionery, ice-cream and similar products
- carbonated and flavoured beverages (including flavoured milk, flavoured water and sports drinks) unless at least 90% by volume fruit or vegetable juice
- all food and beverages sold in restaurants or for consumption on the premises
- hot food (takeaway)
- food marketed as prepared meals and some prepared food, including platters
- any food not for human consumption
- pet food or any food labelled or specified for animals.
GST IN THE FOOD CHAIN
GST is applied at certain stages in the food supply chain. GST is only applied where the food item is either:
- not for human consumption at a particular stage in the supply chain
- taxable under GST law.